Logica PLC Logica reports FY results in line with 14 Dec guidance

 
TIDMLOG 
 
22 February 2012 
 
 
 
Logica reports full year results in line with 14 December guidance(1,2) 
 
 
 
Headlines 
 
Full year orders up 13% to GBP4.6 billion, driven by Outsourcing orders up 23% to 
GBP2.2 billion 
 
Full year revenue up 3% to GBP3.9 billion; adjusted operating profit down 
significantly on last year at GBP114 million including the impact of the GBP132 
million of restructuring and contract charges announced on 14 December 2011. 
 
Underlying revenue was up 4% to GBP3.9 billion. Underlying performance was: 
 
Outsourcing revenue up 9%, with second half revenue up 7% 
 
Consulting and Professional Services revenue flat, with second half revenue 
down 1% 
 
Revenue in the commercial sectors was up 7%, offset by a 3% decline in Public 
Sector 
 
Fourth quarter weakness seen particularly in the Benelux and Sweden 
 
Underlying adjusted operating profit at GBP247 million was in line with December 
guidance 
 
Full year cash conversion of 92% resulted in operating cash inflow of GBP226 
million 
 
Net debt/EBITDA at 0.9x, with net debt at GBP295 million at year end (2010: GBP280 
million) 
 
Full year dividend recommended to be 4.4p, up 5% over 2010 
 
 
 
 For the year ended 31 December 2011, results were as follows: 
 
                                 Twelve months to December        Twelve months to 
                                                                      December 
 
GBP'm                               2011      2010     Change         2010        Change 
                                       Pro forma                  Actual 
 
Orders                           4,633     4,090        13%        3,972           17% 
 
Underlying revenue               3,950     3,806         4%        3,697            7% 
 
Underlying adjusted operating      247       278      (11)%          272          (9)% 
profit 
 
Underlying adjusted operating     6.2%      7.3%   (110)bps         7.4%      (120)bps 
margin 
 
Operating cash inflow              226       270      (16)%          270         (16)% 
 
Underlying adjusted basic EPS    11.3p     12.3p       (8)%        12.3p          (8)% 
 
 
 
Operating profit                    55       211      (74)%          211         (74)% 
 
Operating margin                  1.4%      5.7%   (430)bps         5.7%      (430)bps 
 
Basic EPS                         1.7p      9.6p      (82)%         9.6p         (82)% 
 
 
1 Unless otherwise stated, comparatives in the statement relate to the pro 
forma numbers. For definition of pro forma, adjusted operating profit, adjusted 
operating margin and basic adjusted EPS, please see notes on page 15. 
 
2 Underlying numbers have been included here for ease of comprehension and 
reflect numbers before the impact of GBP39 million of contract charges and GBP93 
million of restructuring charges announced on 14 December 2011, please see 
notes on page 17. 
 
 
 
Commenting on today's announcement, Andy Green, CEO, said: 
 
 
 
"2011 was a more difficult year then we had expected. While our order book at GBP 
4.6 billion was strong and revenue was up 3%, restructuring and contract 
charges resulted in a lower adjusted operating profit. 
 
 
 
Building on our successful long-term relationships with clients, we signed 
significant orders with clients such as Shell and Michelin. We had important 
wins with new clients such as BAE Systems and the Swedish Pensions Agency. 
 
 
 
The revenue outlook remains uncertain but we are on track in implementing the 
actions we announced in December. As a result, we expect our Benelux business 
to return to profit in 2012, our Swedish business to deliver an improved margin 
and our Outsourcing business to be strongly competitive. Even in tough market 
conditions, we expect our full year operating margin for 2012 to be above 
6.5%." 
 
 
 
 
 
For further information, please contact: 
 
 
 
Logica Investor Relations:          Karen Keyes +44 (0) 7801 723682 / Jose Cano 
+44 (0) 20 7446 1338 
 
Logica Media relations:                        Louise Fisk +44 (0) 7798 857770 
 
Brunswick:                              Sarah West/Jonathan Glass: +44 (0) 20 
7404 5959 
 
 
 
Financial overview1 
 
 
 
Group orders reached GBP4,633 million for the full year (2010 actual: GBP3,972 
million), with Outsourcing orders up 23% to GBP2,179 million. 
 
 
 
Revenue for the full year was GBP3,921 million (2010 actual: GBP3,697 million), up 
6%. 
 
 
 
Adjusted operating profit was GBP114 million (2010 actual: GBP272 million), with 
margin at 2.9% (2010 actual: 7.4%) including GBP39 million of contract charges 
and GBP93 million of restructuring charges announced on 14 December 2011. 
Underlying adjusted operating margin was 6.2% (2010 pro forma: 7.3%) 
 
 
 
Revenue                                         Twelve months to December 
 
GBP'm                                             2011 
                                                Actual 
 
Revenue                                         3,921 
 
Contract charges                                29 
 
Underlying revenue                              3,950 
 
Operating Profit 
 
Adjusted operating profit                       114 
 
Adjusted operating margin                       2.9% 
 
Contract charges                                39 
 
Restructuring                                   93 
 
Underlying adjusted operating profit            247 
 
Underlying adjusted operating margin            6.2% 
 
EPS 
 
Adjusted basic EPS                              4.5p 
 
Underlying adjusted basic EPS                   11.3p 
 
 
1 Underlying numbers have been included where appropriate for ease of 
comprehension and reflect numbers before the impact of GBP39 million of contract 
charges and GBP93 million of restructuring charges announced on 14 December 2011. 
Numbers in the tables are rounded. 
 
 
 
In addition to the charges announced in December, the adjusted operating profit 
also includes the benefit of a GBP7 million pension curtailment gain in the 
Benelux and the impact of the previously announced GBP24 million of additional 
restructuring charges mainly taken in the first half of the year. 
 
 
 
After GBP59 million of charges, mainly related to amortisation of intangibles and 
GBP5 million of exceptional cost related to our Grupo Gesfor acquisition, 
operating profit was GBP55 million (2010 actual: GBP211 million). Operating margin 
was 1.4% (2010 actual: 5.7%). 
 
 
 
Adjusted basic EPS was 4.5p and underlying adjusted basic EPS was 11.3p (2010 
actual: 12.3p). 
 
 
 
As expected, cash generation in the second half was strong. Full year cash 
conversion of 92% resulted in a net cash inflow for the year of GBP226 million. 
Closing net debt was GBP295 million (31 December 2010: GBP280 million). This 
represented net debt/EBITDA of 0.9x. 
 
 
 
 
Outlook 
 
 
 
We finished the year with a strong order performance with a number of 
significant long term contracts signed both in the first and last quarters of 
2011. We have a healthy multi-year order backlog that we will deliver over the 
next few years. Our Consulting and Professional Services book to bill remained 
solid through the second half at 112%. This was despite the pockets of weakness 
we saw at a client level through the second half of 2011, with some clients 
reducing discretionary spend in the face of an uncertain economic climate. 
 
 
 
We continue to be cautious about the economic outlook in our main markets and 
our guidance for 2012 remains unchanged, with revenue growth expected to be in 
the range of -2% to +2%. 
 
 
 
Our restructuring programme is on track. In the Benelux and Sweden, we expect 
to see benefits as the bench reduces and utilisation improves with a large 
number of people leaving the business. Exits and the first phase of 
rationalisation of facilities in the Benelux will mainly occur through the 
second and third quarters with GBP25 to GBP35 million of savings largely in the 
second half.  This underpins our continued expectation that our Benelux 
business will return to profit in 2012; our Swedish business will deliver an 
improved margin and our IM business will be strongly competitive going forward. 
Overall, these actions lead us to a view that full year 2012 operating margin 
will be above 6.5% even if difficult market conditions prevail. 
 
 
 
Our balance sheet is strong. After the 2012 cash impact of restructuring of 
between GBP60 to GBP70 million, the bulk of which will be in the first half, net 
debt/EBITDA at the end of 2012 will be around 1.0x. 
 
 
 
The Board has confirmed its commitment to a dividend payout of at least 40% of 
after tax profit in 2012. 
 
 
 
 
 
Progress with clients 
 
 
 
 
 
Revenue                           Six months to December     Twelve months to December 
 
                                                    Change                       Change 
GBP'm                                 2011    2010                2011    2010 
 
Trade, Transport and Industrial      573     518       11%     1,147   1,056         9% 
 
Public Sector                        556     562      (1)%     1,122   1,160       (3)% 
 
Energy and Utilities                 361     327       10%       719     652        10% 
 
Financial Services                   312     330      (5)%       638     624         2% 
 
Telecoms and Media                   155     170      (9)%       324     314         3% 
 
Total                              1,957   1,907        3%     3,950   3,806         4% 
 
 
 
 
We continued to improve our position with clients and our investment in sales 
and marketing resulted in better qualification of our pipeline at the earlier 
stages. 
 
 
 
Revenue from our top 50 clients was up 11% despite a difficult market. Second 
half growth slowed due to our Public Sector clients and we saw some softness at 
a client level in other sectors. Overall, revenue from our top 50 clients 
represented 44% of group revenue, compared to 42% at the end of 2010. Despite a 
growing concentration of revenue with our largest clients, this remains well 
spread with no client accounting for more than 3% of revenue. 
 
 
 
Progress on labour 
 
 
 
Our Group headcount has risen to 41,784 (31 December 2010: 39,284 employees) 
with around 1,200 Grupo Gesfor employees joining Logica. 
 
 
 
About 7,100 or 17% (2010 actual: 15%) of our total headcount was located in our 
nearshore and offshore centres, compared to 5,800 at the end of 2010. We have 
opened a second site in Bangalore and at the end of 2011, we are approaching 
1,000 employees in the Philippines. 
 
Gross recruitment in the second half was around 2,400 taking the overall number 
for the year to around 6,500. This was offset by attrition, which remained 
stable at around 13% and is broadly in line with industry averages. 
 
 
 
Wage increases averaged around 3% across the business with a strong emphasis on 
retaining key skills. We continue to recruit new graduates and increase the use 
of offshore labour. 
 
Progress on cash 
 
 
 
The net cash inflow from trading operations was GBP226 million (2010 actual: GBP270 
million), leading to a cash conversion ratio of 92% (2010 actual: 99%) on 
underlying adjusted operating profit of GBP247 million. 
 
 
 
Group net debt at 31 December 2011 was GBP295 million (2010 actual: GBP280 
million), leading to net debt/EBITDA of 0.9x in line with our guidance. We 
expect net debt/EBITDA at December 2012 to be around 1.0x including for the GBP60 
to GBP70 million outflow relating to restructuring activities. 
 
 
 
In December 2011 and January 2012, we signed a total of EUR150 million of new 
five-year bilateral bank facilities. This continued to diversify our sources 
and maturity of funding. Debt facilities currently stand at GBP872 million. 
 
 
 
 
 
 
 
Service line performance 
 
 
 
Outsourcing 
 
 
 
                                     Six months to December   Twelve months to December 
 
GBP'm                                                  Change                      Change 
                                       2011   2010               2011    2010 
 
Backlog at end of period              2,632  2,270      16%     2,632   2,270       16% 
 
Orders                                  950    817      16%     2,179   1,776       23% 
 
Underlying revenue                      879    821       7%     1,757   1,614        9% 
 
Underlying adjusted operating profit     71     66       8%       125     118        6% 
 
Underlying adjusted operating margin 
%                                       8.1    8.0    10bps       7.1     7.3     (20)bps 
 
 
 
Orders by type 
 
Applications Management (AM)            531    449      18%     1,062     957       11% 
 
Infrastructure Management (IM)          294    321     (8)%       712     708        1% 
 
Business Process Outsourcing (BPO)      125     47     166%       405     111      265% 
 
Underlying revenue by type 
 
Applications Management                 444    420       6%       909     826       10% 
 
Infrastructure Management               338    325       4%       666     638        4% 
 
Business Process Outsourcing             97     76      28%       182     150       21% 
 
 
 
 
Outsourcing orders were up 23%, driving outsourcing order backlog up 13% to GBP 
2.6 billion (end 2010: GBP2.3 billion). BPO and applications management remained 
the fastest growing areas. In the second half, we saw good growth particularly 
in the UK on the back of the BAE Systems HR BPO contract win. 
 
 
 
Full year underlying revenue was up 9% to GBP1,757 million and represented 45% of 
Group revenue (2010: 43%). Our largest areas, applications and infrastructure 
management, both grew well. Our BPO revenue was up 21% in the year to 10% of 
total outsourcing revenue. 
 
 
 
Underlying adjusted operating profit was GBP125 million, reflecting an underlying 
adjusted operating margin of 7.1%. 
 
 
 
 
 
 
 
Consulting and Professional Services 
 
 
 
                                        Six months to December        Twelve months to 
                                                                          December 
 
GBP'm                                                      Change                     Change 
                                          2011   2010               2011   2010 
 
Book to bill %                             113    108      n.a.      112    105       n.a. 
 
Orders                                   1,212  1,100       10%    2,454  2,314         6% 
 
Underlying revenue                       1,078  1,086      (1)%    2,193  2,192         0% 
 
Underlying adjusted operating profit        63     85     (26)%      122    161      (24)% 
 
Underlying adjusted operating margin  %    5.8    7.9  (210)bps      5.5    7.3   (180)bps 
 
 
 
 
Consulting and Professional Services achieved a solid book to bill ratio of 
112%, with orders up 6% on last year. Revenue for the full year was flat on 
2010. In the second half, revenue was down 1% to GBP1,078 million, reversal of 
the 1% growth we saw during the first six months of the year. As the result of 
the weakness in Sweden and the Benelux and the incorporation of restructuring 
charges during the first half, the underlying adjusted operating profit was GBP 
122 million with an underlying adjusted operating margin of 5.5%. 
 
 
 
Revenue mix in this part of the business continued to shift in 2011, with 
Business Consulting revenue up 14%. It now represents 20% of the Consulting and 
Professional Services total revenue and about 9% of total group headcount, with 
3,700 people at the end of 2011. Within Business Consulting, we continue to 
recruit capability in our Microsoft Cloud, Customer Analytics and Business 
Intelligence practices, although we are being cautious in light of uncertain 
demand. 
 
 
 
 
 
 
 
Segmental performance 
 
 
 
France 
 
 
 
                                             Six months to          Twelve months to 
                                                December                December 
 
GBP'm                                                     Change                    Change 
                                          2011  2010               2011   2010 
 
Reported 
 
Consulting and Professional Services book 
to bill %                                  130   117      n.a.      119    111      n.a. 
 
Orders                                     558   468       19%    1,056    949       11% 
 
Revenue                                    420   409        3%      875    824        6% 
 
Adjusted operating profit                   33    36      (8)%       74     69        7% 
 
Adjusted operating margin %                7.9   8.7   (80)bps      8.5    8.4     10bps 
 
 
 
Underlying 
 
Revenue                                    423   409        3%      878    824        7% 
 
Adjusted operating profit                   36    36        0%       77     69       12% 
 
Adjusted operating margin %                8.5   8.7   (20)bps      8.8    8.4     40bps 
 
Revenue analysis: 
 
By sector 
 
Trade, Transport and Industrial            172   154       12%      346    314       10% 
 
Financial Services                         113   108        5%      225    211        7% 
 
Other Sectors                              138   147      (6)%      307    299        3% 
 
By service line 
 
Outsourcing                                190   182        4%      398    356       12% 
 
Consulting and Professional Services       233   227        3%      480    468        3% 
 
 
 
 
For the first time, orders in France exceeded GBP1 billion ending at GBP1,056 
million. A strong finish to the year was driven by good orders in both 
Outsourcing and Consulting and Professional Services, including a seven-year 
contract for the implementation of the first open data portal launched by the 
French State. We expect to see some slowing in decision making in Financial 
Services and in the Public Sector ahead of the election in 2012. 
 
 
 
Underlying revenue for the full year was up 7% to GBP878 million above the market 
and one of the strongest in the group. In the second half, the level of growth 
was 3%, lower than during the first six months as a result of the conclusion of 
several projects in the Energy and Utilities sector. Our largest sector 
Transport, Trade and Industrial reached double-digit growth for the full year 
as demand in the retail and transportation arenas continued to be strong during 
the second half. Underlying adjusted operating margin was 8.8%. 
 
 
 
On a reported basis, margin was 8.5%, including GBP3 million of contract charges 
taken in December. This was slightly above 2010 as we focused on higher margin 
services and expanded the use of our blended delivery approach with our 
clients. 
 
 
 
 
 
Northern and Central Europe 
 
 
 
                                             Six months to          Twelve months to 
                                                December                December 
 
GBP'm                                                     Change                    Change 
                                          2011  2010              2011   2010 
 
Reported 
 
Consulting and Professional Services book 
to bill %                                  116    99      n.a.     116    103       n.a. 
 
Orders                                     436   434        0%     896    921       (3)% 
 
Revenue                                    426   413        3%     860    805         7% 
 
Adjusted operating profit                   35    36      (3)%      65     62         5% 
 
Adjusted operating margin %                8.2   8.8   (60)bps     7.5    7.7    (20)bps 
 
 
 
Underlying 
 
Revenue                                    426   413        3%     860    805         7% 
 
Adjusted operating profit                   37    36        3%      67     62         8% 
 
Adjusted operating margin %                8.7   8.8   (10)bps     7.8    7.7      10bps 
 
Revenue analysis: 
 
By sector 
 
Trade, Transport and Industrial            150   119       26%     297    262        13% 
 
Public Sector                              124   119        4%     244    238         3% 
 
Other Sectors                              152   175     (13)%     319    305         5% 
 
By service line 
 
Outsourcing                                134   127        6%     278    242        15% 
 
Consulting and Professional Services       292   286        2%     582    563         3% 
 
 
 
 
Orders for the full year were down 3% . Outsourcing orders were down 33% 
against strong comparatives offset by good second half order intake in 
Consulting and Professional Services. Overall, Consulting and Professional 
Services finishing the year with a book to bill of 116%, with a number of 
smaller wins across the cluster. Among the orders recorded during the year were 
orders with eToll audit in Poland and the National digital library in Czech 
Republic. Since the end of December, we have signed a seven-year Outsourcing 
BPO contract for meter-2-cash and customer management services for a Danish 
utility, Tre-for. 
 
 
 
For the full year, underlying revenue was up 7% to GBP860 million, with growth of 
9% in Finland and 8% in Germany. Revenue in Norway was broadly stable. 
 
 
 
As expected, we saw a lower level of revenue growth in the second half, up 3% 
to GBP426 million. Excellent performance with our Trade, Transport and Industrial 
clients compensated for the decline in the Telecoms sector. Finland and Germany 
were up 5% and 3.5% respectively in the second half of the year and Denmark 
reached a steady state of business entering into the second year of the 
PostNord contract. 
 
 
 
On a reported basis, margin was 7.5%, slightly below 2010 due to a GBP2 million 
restructuring charge we took in December relating to the IM business. 
Underlying operating margin was broadly stable on 2010 at 7.8%. 
 
 
 
Utilisation remained strong and we made progress on expanding the use of our 
blended delivery approach and increased our focus on service delivery. 
 
 
 
 
 
UK 
 
 
 
                                              Six months to          Twelve months to 
                                                 December                December 
 
GBP'm                                                      Change                   Change 
                                           2011  2010              2011  2010 
 
Reported 
 
Consulting and Professional Services book 
to bill %                                   129    96      n.a.     128    92       n.a. 
 
Orders                                      498   248      101%   1,179   551       114% 
 
Revenue                                     364   342        6%     725   709         2% 
 
Adjusted operating profit                     2    34     (94)%      16    60      (73)% 
 
Adjusted operating margin %                 0.7  10.0      n.a.     2.2   8.5       n.a. 
 
 
 
Underlying 
 
Revenue                                     381   342       11%     742   709         5% 
 
Adjusted operating profit                    33    34      (3)%      47    60      (22)% 
 
Adjusted operating margin %                 8.8  10.0  (120)bps     6.3   8.5   (220)bps 
 
Revenue analysis: 
 
By sector 
 
Public Sector                               210   209        0%     418   439       (5)% 
 
Energy and Utilities                         93    50       86%     163   108        51% 
 
Other Sectors                                78    83      (6)%     161   162         0% 
 
By service line 
 
Outsourcing                                 223   183       22%     425   377        13% 
 
Consulting and Professional Services        158   159      (1)%     317   332       (5)% 
 
 
 
 
The volume of orders signed during 2011 reached GBP1,179 million, more than 
double the GBP551 million of 2010. This was a result of two 10-year contracts 
booked in the first quarter in 2011 with the Serious Organised Crime Agency and 
Shell as well as a number of contract extensions with existing clients in the 
fourth quarter. 
 
 
 
Underlying revenue for the full year was up 5% to GBP742 million, driven by a 20% 
revenue increase in the commercial sectors. Public sector was flat in the 
second half of the year.  The build phase on a number of contracts saw full 
year revenue grow more than 15% in Financial Services and Telecoms and a strong 
performance in Energy and Utilities. 
 
 
 
On an underlying basis, excluding restructuring, margin was 6.3% (2010: 8.5%). 
 
 
 
On a reported basis, margin was 2.2%. This is after the GBP10 million 
restructuring charge we took in the first half of 2011 as well as the GBP28 
million of the contract charges and GBP3 million of the restructuring charges we 
announced in December. 
 
 
 
 
 
Sweden 
 
 
 
                                             Six months to          Twelve months to 
                                                December                December 
 
GBP'm                                                     Change                    Change 
                                           2011  2010              2011   2010 
 
Reported 
 
Consulting and Professional Services book 
to bill %                                   101   113     n.a.      109    125      n.a. 
 
Orders                                      300   323     (7)%      628    797     (21)% 
 
Revenue                                     300   303     (1)%      622    605        3% 
 
Adjusted operating profit                  (18)    24     n.a.      (9)     41      n.a. 
 
Adjusted operating margin %               (6.1)   7.9     n.a.    (1.4)    6.7      n.a. 
 
 
 
Underlying 
 
Revenue                                     300   303     (1)%      622    605        3% 
 
Adjusted operating profit                    13    24    (46)%       23     41     (44)% 
 
Adjusted operating margin %                 4.4   7.9     n.a.      3.6    6.7      n.a. 
 
Revenue analysis: 
 
By sector 
 
Trade, Transport and Industrial             142   136       4%      292    269        9% 
 
Public Sector                                81    81       0%      165    164        1% 
 
Other Sectors                                77    86    (10)%      165    172      (4)% 
 
By service line 
 
Outsourcing                                 189   185       2%      374    360        4% 
 
Consulting and Professional Services        111   118     (6)%      248    245        1% 
 
 
 
 
After four consecutive quarters of orders decline, we saw a positive end to the 
year.  Fourth quarter orders were up 1% on 2010 as we renewed a series of 
Outsourcing orders with our clients in the Public Sector and Transport, Trade 
and Industrial. We signed contracts with new clients such as the Swedish 
Pensions Agency which runs for five years with an opportunity to extend by two 
years and an estimated value of GBP13 million. 
 
 
 
Underlying revenue for the full year was up 3%. However, the second half was 
down 1% against tougher comparatives and continuing weakness in most commercial 
sectors. 
 
 
 
The underlying margin was 3.6% (2010: 6.7%). The margin was particularly 
impacted by the transition of a number of large contracts and the short-term 
use of extra resources including subcontracting to support these transitions. 
 
 
 
On a reported basis, margin for the full year was (1.4)%. In December, we took 
a restructuring charge of GBP31 million in order to accelerate the transformation 
of our IM business and prepare the business to face a more uncertain economic 
environment. This resulted in a full year loss of GBP9 million compared to a GBP41 
million profit in 2010. 
 
 
 
We expect our Swedish business to deliver an improved margin in 2012 and our IM 
business to be strongly competitive going forward. 
 
 
 
 
 
Benelux 
 
 
 
                                             Six months to          Twelve months to 
                                                December                December 
 
GBP'm                                                     Change                    Change 
                                            2011  2010              2011   2010 
 
Reported 
 
Consulting and Professional Services book 
to bill %                                    113   108    n.a.       106    103     n.a. 
 
Orders                                       237   257    (8)%       586    525      12% 
 
Revenue                                      222   240    (8)%       464    490     (5)% 
 
Adjusted operating profit                   (73)     2    n.a.      (72)     14     n.a. 
 
Adjusted operating margin %               (33.1)   0.9    n.a.    (15.6)    2.9     n.a. 
 
 
 
Underlying 
 
Revenue                                      231   240    (4)%       473    490     (4)% 
 
Adjusted operating profit                    (8)     2    n.a.       (7)     14     n.a. 
 
Adjusted operating margin %                (3.3)   0.9    n.a.     (1.4)    2.9     n.a. 
 
Revenue analysis: 
 
By sector 
 
Financial Services                            63    75   (16)%       134    147     (9)% 
 
Public Sector                                 69    75    (8)%       140    162    (14)% 
 
Trade, Transport and Industrial               49    44     11%       102     87      17% 
 
Other Sectors                                 50    46      9%        97     94       3% 
 
By service line 
 
Outsourcing                                   45    39     15%        85     79       8% 
 
Consulting and Professional Services         186   201    (7)%       388    411     (6)% 
 
 
 
 
Orders for the full year were up 12%. This was due to good Outsourcing wins in 
the first half with Ahold and a Financial Services client, combined with the 
highest order intake in Consulting and Professional Services since the end of 
2008, finishing the year with a book to bill of 106%. 
 
 
 
The underlying revenue fell from GBP490 million in 2010 to GBP473 million in 2011 
which resulted in a negative underlying adjusted operating margin of (1.4)%. 
 
 
 
Since the end of the third quarter, we continued to see further deterioration 
with our Financial Services clients, ending the fourth quarter 20% below the 
fourth quarter of 2010. Over the second half, we have seen good momentum in all 
other commercial sectors up 10% on last year. While the quarterly rate of 
revenue in the Public Sector was broadly stable through 2011, revenue was down 
8% on second half of 2010. Utilisation was in the low to mid seventies through 
the second half of 2011. 
 
 
 
The full year saw a loss of GBP72 million on a reported basis.  This included the 
accounting for the profit benefit of a curtailment gain of GBP7 million following 
the closure of the CMG Netherlands Defined Benefit Pension Scheme to future 
salary accruals; the cost of restructuring charges taken in the first half and 
in December totaling GBP57 million; and finally GBP9 million of contract charges. 
 
 
 
 
 
International 
 
 
 
                    Six months to December                  Twelve months to December 
 
                                            Change                                    Change 
GBP'm            2011        2010                         2011         2010 
 
Reported 
 
Consulting 
and 
Professional 
Services 
book to bill 
%                48         136               n.a.        70          102               n.a. 
 
Orders          139         183              (24)%       287          352              (18)% 
 
Revenue         196         200               (2)%       375          373                 1% 
 
Adjusted 
operating 
profit           22          19                16%        40           31                29% 
 
Adjusted 
operating 
margin %       11.1         9.5             160bps      10.7          8.4             230bps 
 
 
 
Underlying 
 
Revenue         196         200               (2)%       375          373                 1% 
 
Adjusted 
operating 
profit           22          19                16%        40           31                29% 
 
Adjusted 
operating 
margin %       11.1         9.5             160bps      10.7          8.4             230bps 
 
Revenue 
analysis: 
 
By sector 
 
Energy and 
Utilities       121         121                 0%       244          234                 4% 
 
Financial 
Services         24          28              (14)%        42           40                 5% 
 
Other 
Sectors          51          51                 0%        89           99              (10)% 
 
By service 
line 
 
Outsourcing      98         105               (7)%       197          200               (2)% 
 
Consulting 
and 
Professional 
Services         98          95                 3%       178          173                 3% 
 
 
 
 
Orders for the second half were down 24% on 2010, against strong comparatives 
in 2010 when we renewed a number of major contracts. 
 
 
 
Underlying revenue for the International cluster was up 1% at GBP375 million 
(2010: GBP373 million). 
 
 
 
Iberia revenue accounted for 33% (2010: 33%) of the total at GBP122 million and 
was down 1% in a difficult economic environment. Approximately GBP28 million of 
revenue from our acquisition of Grupo Gesfor was consolidated, predominantly in 
Iberia. 
 
 
 
Rest of World revenue was up 1% to GBP252 million. Australia remains the largest 
component in the Rest of World cluster. Good growth in the US was offset by 
weakness in Australia. 
 
 
 
Adjusted operating margin was 10.7%, up from last year (2010: 8.4%), where a GBP5 
million charge was taken related to project overruns in the Brazilian business. 
Margin was underpinned by tight cost management and high utilisation rates in 
our key geographies. 
 
 
 
 
 
Financial position 
 
 
 
Summary cash flow                                           Twelve months to 
                                                                December 
 
GBP'm                                                             2011      2010 
 
                                                                 114 
Adjusted operating profit                                                  272 
 
Depreciation and amortisation of intangibles not                  65        58 
recognised on acquisition 
 
Movement in working capital                                     (63)      (56) 
 
Other non-cash movements                                        (22)       (4) 
 
Non-cash movements from restructuring and contract charges       132         0 
 
Net cash inflow from continuing operations                       226       270 
 
Cash conversion on underlying adjusted operating profit          92%       99% 
 
Cash flow related to restructuring and other non-operating      (14)      (45) 
items 
 
Net financing cost paid                                         (15)      (16) 
 
Income tax paid                                                 (36)      (51) 
 
Capex less disposals of property, plant & equipment and         (79)      (74) 
intangible assets 
 
Impact of acquisitions and disposals                            (27)       (6) 
 
Dividends paid to shareholders                                  (70)      (67) 
 
 
Opening net debt                                               (280)     (291) 
 
 
Closing net debt                                               (295)     (280) 
 
 
 
 
The net cash inflow from trading operations was GBP226 million (2010 actual: GBP270 
million inflow), driven by lower operating profit offset by non-cash movements 
related to the charges announced in December.  This represented 92% cash 
conversion, which has been calculated using the underlying adjusted operating 
profit in order to take into account the non-cash impact of the contract and 
restructuring charges. 
 
 
 
The movement in working capital was an outflow of GBP63 million which was 
materially driven by the growth in outsourcing. 
 
 
 
Payment in respect of dividends was GBP70 million (2010: GBP67 million). 
 
 
 
The net debt number includes GBP27 million related to our acquisition of Grupo 
Gesfor. 
 
 
 
Net debt at 31 December 2011 was GBP295m with leverage of 0.9, in line with our 
guidance. 
 
 
 
 
 
Other information 
 
 
 
Profit before tax and earnings per share 
 
Profit before tax was GBP33 million (2010 actual: GBP193 million). Basic adjusted 
earnings per share from continuing operations were 4.5p (2010: 12.3p) on a 
weighted average number of shares of 1,597 million (2010: 1,589 million). Basic 
earnings per share from continuing operations were 1.7p (2010: 9.6p). All 
operations were continuing. 
 
 
 
Taxation 
 
The effective tax rate, before exceptional items and amortisation of intangible 
assets initially recognised on acquisition, was 23% (2010: 23%). The total tax 
charge for the year ended 31 December 2011 was GBP5.5 million (2010: GBP41 
million). The overall tax rate for the period was 16.8% (2010: 21%). 
 
 
 
The effective tax rate for 2012 is expected to be at around 24%. 
 
 
 
Acquisitions 
 
On 24 May 2011, Logica completed the acquisition of Grupo Gesfor, a privately 
held Spanish consulting and professional services business. Grupo Gesfor has 
around 1,200 employees and operations in Spain and across Latin America. 
Approximately GBP28 million of revenue has been consolidated in the year ended 31 
December 2011. Grupo Gesfor had combined revenues of EUR64 million (GBP55 million) 
for the year ended 31 December 2010. The total cost is expected to be up to EUR31 
million (GBP25 million) of which EUR24 million (GBP21 million) was paid in cash upon 
completion. We had a GBP17 million cash outflow, net of cash acquired, related to 
the acquisition in the first half. 
 
 
 
Dividend 
 
 
 
The Board's policy is to ensure a return to shareholders which flows through 
our dividend policy, while continuing to provide sufficient funds to invest in 
the long term sustainability of the business.  As a result, the Board has 
reaffirmed its recommendation for a dividend payout ratio of at least 40%. 
 
 
 
The proposed full year dividend of 4.4p (2010: 4.2p) represents a payout of 
around 39% of underlying adjusted EPS of 11.3p and a 5% increase in the full 
year dividend over last year.  The directors are therefore proposing that the 
final dividend of 2.3p (2010: 2.3p) be paid on 16 May 2012 to eligible 
shareholders on the register at the close of business on 13 April 2012. 
 
 
 
Next financial calendar dates 
 
Logica's next scheduled communications to the market are: 
 
Friday, 11 May 2012          Q1 2012 Interim Management Statement and AGM 
 
Friday, 3 August 2012        H1 2012 Preliminary results 
 
Wednesday, 31 October 2012   Q3 2012 Interim Management Statement 
 
 
 
 
 
Notes: 
 
 
 
1.Unless otherwise stated, comparatives in the statement relate to the pro 
forma numbers. For definition of pro forma, adjusted operating profit, adjusted 
operating margin and basic adjusted EPS, see notes below. 
 
2.Underlying numbers have been included here for ease of comprehension and 
reflect numbers before the impact of GBP39 million of contract charges and GBP93 
million of restructuring charges announced on 14 December 2011. 
 
3. With the exception of adjusted operating margin percentages, all numbers in 
this release have been rounded. Adjusted operating margin reflects the adjusted 
operating margin reported in the consolidated financial statements. 
 
4.Cash conversion represents net cash inflow from trading operations divided by 
underlying adjusted operating profit. Net cash inflow from trading operations 
is cash generated from operations before cash flows from proceeds on forward 
contracts, the purchase of property, plant, equipment, intangibles and 
restructuring and integration activities. 
 
5.Book to bill percentage is a measure of the level of orders relative to 
revenue in the period. 
 
6.Unless otherwise stated, the comparatives in this release relate to pro forma 
results for 2010 which: 
 
a.reflect average 2011 exchange rates by retranslating prior period actual 
numbers at average 2011 exchange rates. This increased 2010 revenue by GBP87 
million and adjusted operating profit by GBP5 million. 
 
b.are adjusted to include the acquisition and disposals that took place during 
2010 and 2011 by adjusting the actual prior period numbers for the relevant 
period owned. This increased 2010 revenue by GBP22 million and increased adjusted 
operating profit by GBP1 million. 
 
c.includes a number of changes to the scope of outsourcing activities in some 
of our geographies 
 
7Adjusted operating profit and margin are from continuing operations and before 
exceptional items and amortisation of intangible assets initially recognised at 
fair value in a business combination. 
 
 
 
                                      Six months to      Twelve months to December 
                                           December 
 
                                                           2010 
GBP'm                                            2011 2011    Pro   2010 Change    Change 
                                                          forma Actual    Pro    Actual 
                                                                        forma 
 
Operating profit/(loss)                        (28)   55      -      -      -     (74)% 
 
Add back impact of: 
 
Exceptional items                                 2    5      -      -      -         - 
 
Amortisation of acquisition                           54                    - 
related intangibles                              27           -      -                - 
 
Adjusted operating profit                         1  114    278    272  (59)%     (58)% 
 
 
 
 
8.Adjusted earnings per share is based on net profit attributable to ordinary 
shareholders, excluding the following items, whenever such items occur: 
 
a.discontinued operations 
 
b.exceptional items 
 
c.mark-to-market gains or losses on financial assets designated as fair value 
hedges through profit or loss 
 
d.amortisation of intangible assets initially recognised at fair value in a 
business combination 
 
tax on the items above 
 
 
 
9.Exchange rates used are as follows: 
 
 
 
        Six months   Six months Twelve months Six months   Six months Twelve months 
           to June  to December   to December    to June  to December   to December 
 
              2011         2011          2011       2010         2010          2010 
 
GBP1 / EUR 
 
Average       1.15         1.15          1.15       1.15         1.18          1.17 
 
End of 
period        1.11         1.20          1.20       1.22         1.17          1.17 
 
 
 
GBP1 / 
SEK 
 
Average      10.28        10.53         10.41     11. 26        10.99         11.12 
 
End of 
period       10.13        10.65         10.65      11.64        10.53         10.53 
 
 
 
 
 
 
 
Appendix 1 
 
 
 
Geography and sector performance 
 
The following tables show reported revenue and profit at actual exchange rates. 
 
 
 
Performance by geography actual 2011 vs actual 2010 
 
                                 Six months to December      Twelve months to December 
 
GBP'm                                2011     2010    Change      2011      2010    Change 
                                 Actual   Actual              Actual    Actual 
 
France 
 
  Revenue                           420      395        6%       875       810        8% 
 
  Adj operating profit               33       34      (3)%        74        68        9% 
 
  Margin %                          7.9      8.7   (80)bps       8.5       8.4     10bps 
 
Northern and Central Europe 
 
  Revenue                           426      398        7%       860       788        9% 
 
  Adj operating profit               35       35        0%        65        61        7% 
 
  Margin %                          8.2      8.9   (70)bps       7.5       7.8     30bps 
 
UK 
 
  Revenue                           364      342        6%       725       709        2% 
 
  Adj operating profit                2       34     (94)%        16        60     (73)% 
 
  Margin %                          0.7     10.0      n.a.       2.2       8.5      n.a. 
 
Sweden 
 
  Revenue                           300      287        5%       622       566       10% 
 
  Adj operating profit             (18)       23      n.a.       (9)        38      n.a. 
 
  Margin %                        (6.1)      7.9      n.a.     (1.4)       6.7      n.a. 
 
Benelux 
 
  Revenue                           222      231      (4)%       464       488      (5)% 
 
  Adj operating profit             (73)        2      n.a.      (72)        14      n.a. 
 
  Margin %                       (33.1)      0.9      n.a.    (15.6)       2.9      n.a. 
 
International 
 
  Revenue                           196      173       13%       375       336       12% 
 
  Adj operating profit               22       19       16%        40        31       29% 
 
  Margin %                         11.1     10.7     40bps      10.7       9.0    170bps 
 
Total 
 
  Revenue                         1,928    1,826        6%     3,921     3,697        6% 
 
  Adj operating profit                1      147     (99)%       114       272     (58)% 
 
  Margin %                          0.1      8.1      n.a.       2.9       7.4      n.a. 
 
 
 
 
Sector performance by geography 2011 vs actual 2010 
 
                               Six months to December      Twelve months to 
                                                               December 
 
GBP'm                               2011    2010  Change   2011     2010   Change 
                                Actual  Actual         Actual   Actual 
 
France 
 
Trade, Transport and               171     148     16%    345      308      12% 
Industrial 
 
Financial Services                 113     105      8%    225      208       8% 
 
Other sectors                      136     142    (4)%    305      294       4% 
 
Northern and Central Europe 
 
Trade, Transport and               150     115     30%    297      257      16% 
Industrial 
 
Public Sector                      124     115      8%    244      233       5% 
 
Other sectors                      152     168   (10)%    319      298       7% 
 
UK 
 
Public Sector                      193     209    (8)%    401      439     (9)% 
 
Energy and Utilities                93      50     86%    163      108      51% 
 
Other sectors                       78      83    (6)%    161      162     (1)% 
 
Sweden 
 
Trade, Transport and               142     129     10%    292      252      16% 
Industrial 
 
Public Sector                       81      77      5%    165      153       8% 
 
Other sectors                       77      81    (5)%    165      161       2% 
 
Benelux 
 
Financial Services                  63      73   (14)%    134      146     (8)% 
 
Public Sector                       60      72   (17)%    131      161    (19)% 
 
Trade, Transport and                49      42     17%    102       89      15% 
Industrial 
 
Other sectors                       50      44     14%     97       92       5% 
 
International 
 
Energy and Utilities               121     118      3%    244      228       7% 
 
Financial Services                  24      14     71%     42       24      75% 
 
Other sectors                       51      41     24%     89       84       6% 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated statement of comprehensive income 
 
For the year ended 31 December 2011 
 
 
 
 
 
 
 
                                                                                   2010 
                                                       2011 
 
                                   Note                 GBP'm                         GBP'm 
 
Revenue                               2             3,921.3                     3,696.8 
 
Net operating costs                               (3,866.8)                   (3,486.2) 
 
Operating profit                    2,4                54.5                       210.6 
 
Analysed as: 
 
      Operating profit before                          59.3                       212.3 
exceptional items 
 
      Exceptional items               3               (4.8)                       (1.7) 
 
      Operating profit              2,4                54.5                       210.6 
 
Finance costs                                        (36.1)                      (27.2) 
 
Finance income                                         13.3                         8.9 
 
Share of post-tax profits from                          1.0                         0.6 
associates 
 
Profit before tax                                      32.7                       192.9 
 
Taxation                              6               (5.5)                      (40.8) 
 
Net profit for the year                                27.2                       152.1 
 
 
 
Other comprehensive income/ 
(expense) 
 
Actuarial gains/(losses) on                            26.7                       (3.1) 
retirement benefit schemes 
 
Tax on items taken directly to                        (7.3)                         0.6 
equity 
 
Cash flow hedges                                      (3.2)                           - 
 
Interest rate swaps fair value                          0.1                       (0.1) 
difference 
 
Exchange differences on                              (54.0)                        11.4 
translation of foreign operations 
 
Other comprehensive income/                          (37.7)                         8.8 
(expense) for the year, net of tax 
 
Total comprehensive income/                          (10.5)                       160.9 
(expense) for the year 
 
 
 
Profit attributable to: 
 
Owners of the parent                                   27.2                       152.1 
 
                                                       27.2                       152.1 
 
 
 
Total comprehensive income/ 
(expense) attributable to: 
 
Owners of the parent                                 (10.5)                       160.9 
 
                                                     (10.5)                       160.9 
 
 
 
Earnings per share                                      p /                   p / share 
                                                      share 
 
- Basic                               8                 1.7                         9.6 
 
- Diluted                             8                 1.7                         9.4 
 
 
 
 
 
 
Consolidated statement of financial position 
 
31 December 2011 
 
 
 
 
 
                                                           2011                     2010 
 
                                  Note                        GBP                        GBP 
                                                             'm                       'm 
 
Non-current assets 
 
Goodwill                                                1,883.4                  1,906.5 
 
Other intangible assets                                   174.0                    200.7 
 
Property, plant and equipment                             139.7                    138.5 
 
Investments in associates                                   2.6                      2.7 
 
Financial assets                                           41.5                     12.5 
 
Retirement benefit assets                                  52.4                     38.7 
 
Deferred tax assets                                        84.0                     70.3 
 
                                                        2,377.6                  2,369.9 
 
Current assets 
 
Inventories                                                 0.8                      1.0 
 
Trade and other receivables                             1,262.0                  1,252.3 
 
Current tax assets                                         24.8                     11.4 
 
Cash and cash equivalents            9                     89.6                     56.4 
 
                                                        1,377.2                  1,321.1 
 
Current liabilities 
 
Other borrowings                    10                   (35.1)                  (204.3) 
 
Trade and other payables                              (1,061.9)                (1,062.4) 
 
Current tax liabilities                                  (89.3)                   (66.6) 
 
Provisions                          11                   (90.0)                   (29.4) 
 
                                                      (1,276.3)                (1,362.7) 
 
 
 
Net current assets/(liabilities)                          100.9                   (41.6) 
 
Total assets less current                               2,478.5                  2,328.3 
liabilities 
 
 
 
Non-current liabilities 
 
Borrowings                          10                  (376.1)                  (132.3) 
 
Retirement benefit obligations                           (69.7)                   (95.2) 
 
Deferred tax liabilities                                 (46.0)                   (61.1) 
 
Provisions                          11                   (47.7)                   (37.1) 
 
Other non-current liabilities                             (5.8)                    (1.4) 
 
                                                        (545.3)                  (327.1) 
 
Net assets                                              1,933.2                  2,001.2 
 
 
 
Equity 
 
Share capital                       12                    161.2                    160.2 
 
Share premium account               13                  1,110.6                  1,107.4 
 
Other reserves                                            661.4                    733.5 
 
Total shareholders' equity                              1,933.2                  2,001.1 
 
Non-controlling interests                                                            0.1 
                                                            - 
 
Total equity                                            1,933.2                  2,001.2 
 
 
 
 
 
 
 
 
Consolidated statement of cash flows 
 
For the year ended 31 December 2011 
 
 
 
 
 
                                                                                   2010 
                                                       2011 
 
                                Note                                                GBP'm 
                                                        GBP'm 
 
Cash flows from operating 
activities 
 
Net cash inflow from trading                          226.4                       270.1 
operations 
 
Cash outflow related to                              (18.4)                      (36.8) 
restructuring and integration 
activities 
 
Cash outflow related to                               (2.7)                       (4.8) 
business acquired/ disposed of 
 
Cash generated from operations    14                  205.3                       228.5 
 
Finance costs paid                                   (21.5)                      (20.1) 
 
Income tax paid                                      (36.4)                      (50.9) 
 
Net cash inflow from operating                        147.4                       157.5 
activities 
 
 
 
Cash flows from investing 
activities 
 
Finance income received                                 6.8                         3.8 
 
Dividends received from                                 1.0                         0.4 
associates 
 
Proceeds on disposal of                                 0.3                         0.2 
property, plant and equipment 
 
Purchases of property, plant                         (49.7)                      (45.8) 
and equipment 
 
Expenditure on other intangible                      (29.2)                      (28.8) 
assets 
 
Repurchase of non-controlling                         (0.1)                           - 
interests 
 
Acquisition of subsidiaries and                      (16.7)                       (8.9) 
other businesses, net of cash 
acquired 
 
Proceeds on disposal of                                   -                         3.2 
subsidiaries and other 
businesses, net of cash 
disposed 
 
Net cash outflow from investing                      (87.6)                      (75.9) 
activities 
 
 
 
Cash flows from financing 
activities 
 
Proceeds from issue of shares                           3.6                         0.4 
allotted under share plans 
 
Refund of expenses related to                             -                         5.6 
shares issued in prior years 
 
Proceeds from bank borrowings                          30.0                       230.9 
 
Repayments of bank borrowings                       (179.8)                     (399.8) 
 
Proceeds from private placement                       187.8                        88.9 
debt notes, net of issuance 
cost 
 
Repayments of finance leases                          (2.4)                       (3.4) 
 
Repayments of other borrowings                        (1.3)                       (0.7) 
 
Net proceeds from forward                             (0.4)                      (17.7) 
contracts 
 
Dividends paid to the Company's                      (70.2)                      (66.8) 
shareholders 
 
Net cash outflow from financing                      (32.7)                     (162.6) 
activities 
 
 
 
Net increase/(decrease) in                             27.1                      (81.0) 
cash, cash equivalents and bank 
overdrafts 
 
 
 
Cash, cash equivalents and bank    9                   30.6                       110.1 
overdrafts at the beginning of 
the year 
 
Net increase/(decrease) in                             27.1                      (81.0) 
cash, cash equivalents and bank 
overdrafts 
 
Effect of foreign exchange         9                  (1.1)                         1.5 
rates 
 
Cash, cash equivalents and bank    9                   56.6                        30.6 
overdrafts at the end of the 
year 
 
 
 
 
 
 
 
 
Consolidated statement of changes in equity 
 
For the year ended 31 December 2011 
 
 
 
                                                                                                                                                Share           Share    Retained        Other           Total            Non-    Total 
                        capital         premium  earnings       reserves        shareholders   controlling 
                                                                                Equity         interests  Equity 
                         GBP'm             GBP'm      GBP'm             GBP'm             GBP'm             GBP'm       GBP'm 
 
At 1 January 2011       160.2         1,107.4  (239.1)           972.6         2,001.1             0.1     2,001.2 
 
Net profit for the year   -               -       27.2             -              27.2                        27.2 
 
Other comprehensive income/(expense): 
 
Actuarial gains on 
retirement benefit schemes -               -       26.7             -              26.7               -        26.7 
 
Tax on items taken to 
equity                      -               -      (7.3)             -             (7.3)               -       (7.3) 
 
Cash flow hedges                                                   (3.2)           (3.2)               -       (3.2) 
 
Interest rate swaps fair 
value difference            -               -        0.1             -               0.1               -         0.1 
 
Exchange differences        -               -                     (54.0)          (54.0)               -      (54.0) 
 
Total comprehensive 
income/(expense)            -               -     46.7          (57.2)          (10.5)                 -      (10.5) 
 
 
 
Transactions with owners: 
 
Dividends paid (Note 7)     -               -     (70.2)             -            (70.2)               -      (70.2) 
 
Repurchase of non-controlling 
interests                    -               -                        -               -               (0.1)     (0.1) 
 
Share-based payment          -               -        9.2             -               9.2               -         9.2 
 
Shares allotted under 
share plans                  1.0             3.2    (0.6)             -               3.6               -         3.6 
 
Total transactions with 
owners                       1.0             3.2   (61.6)             -            (57.4)             (0.1)    (57.5) 
 
At 31 December 2011        161.2         1,110.6  (254.0)           915.4         1,933.2                 -   1,933.2 
 
At 1 January 2010          160.0         1,107.1  (331.1)           961.2         1,897.2               0.1   1,897.3 
 
Net profit for the year        -               -    152.1               -           152.1                 -     152.1 
 
Other comprehensive income/(expense) 
 
Actuarial losses on 
retirement benefit schemes      -               -    (3.1)               -           (3.1)                 -     (3.1) 
 
Tax on items taken to equity    -               -      0.6               -             0.6                 -       0.6 
 
Interest rate swaps 
fair value difference           -               -    (0.1)               -           (0.1)                 -     (0.1) 
 
Exchange differences            -               -        -            11.4            11.4                 -      11.4 
 
Total comprehensive income      -               -    149.5            11.4           160.9                 -     160.9 
 
Transactions with owners: 
 
Dividends paid (Note 7)         -               -   (66.8)               -          (66.8)                 -    (66.8) 
 
Share-based payment             -               -      9.4               -             9.4                 -       9.4 
 
Shares allotted under 
share plans                   0.2             0.3    (0.1)               -             0.4                 -       0.4 
 
Total transactions with 
owners                        0.2             0.3   (57.5)               -          (57.0)                 -    (57.0) 
 
At 31 December 2010         160.2         1,107.4  (239.1)           972.6         2,001.1               0.1   2,001.2 
 
              Note             12              13 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.General information 
 
 
 
Basis of preparation 
 
 
 
The financial information in this preliminary announcement has been extracted 
from the Group's consolidated financial statements for the year ended 31 
December 2011.  These consolidated financial statements have been prepared in 
accordance with International Financial Reporting Standards (IFRSs) as adopted 
by the European Union (EU),  IFRIC interpretations and those parts of the 
Companies Act 2006 (the Act) that are applicable to companies reporting under 
IFRSs. 
 
 
 
The consolidated financial statements have been prepared on a going concern 
basis and under the historical cost convention, as modified by the revaluation 
of certain financial instruments, share options and pension scheme assets. 
 
 
 
This preliminary announcement was approved by the Board of Directors on 21 
February 2012.  The financial information in this preliminary announcement does 
not constitute the statutory accounts of Logica plc ('the Company') within the 
meaning of section 435 of the Act. 
 
 
 
The statutory accounts of the Company for the year ended 31 December 2011, 
which include the Group's consolidated financial statements for that year, were 
unaudited at the date of this announcement.  The auditors' report on those 
accounts is expected to be signed following approval by the Board of Directors 
on 8 March 2012 and subsequently delivered to the Registrar of Companies after 
the Annual General Meeting on 11 May 2012. The statutory accounts for the year 
ended 31 December 2010, which were prepared under IFRS, have been filed with 
the Registrar of Companies. The auditors' report on those accounts was 
unqualified and did not contain a statement under section 498(2) and 498(3) the 
Act. 
 
 
 
Adoption of new and revised International Financial Reporting Standards 
 
 
 
Other than restructuring programmes that are not treated as exceptional item, 
the accounting policies adopted in these consolidated financial statements are 
consistent with those of the annual financial statements for the year ended 31 
December 2010, with the exception of the following standards, amendments to and 
interpretations of published standards adopted during the year: 
 
 
 
(a) New and amended standards adopted by the Group 
 
 
 
There have been only minor improvements to existing International Financial 
Reporting Standards and interpretations that are effective for the first time 
for the financial year beginning on or after 1 January 2011 which have been 
adopted by the Group with no impact on its consolidated results or financial 
position. 
 
 
 
(b) New standards, amendments and interpretations issued but not effective for 
the financial year beginning 1 January 
 
2011 and not early adopted 
 
 
 
IAS 19, 'Employee benefits' was amended in June 2011. The impact on the Group 
will be: to eliminate the corridor approach and recognise all actuarial gains 
and losses in OCI as they occur; to immediately recognise all past service 
costs; and to replace interest cost and expected return on plan assets with a 
net interest amount that is calculated by applying the discount rate to the net 
defined benefit liability/ (asset). 
 
 
 
Amendment to IFRS 7 'Financial instruments: Disclosures', effective on or after 
1 July 2011, improving transparency in the reporting of  transfer transactions 
and improve user's understanding of the risk exposures relating to transfer of 
financial assets and its effect on entity's financial position, particularly 
those involving securitisation of financial assets. 
 
 
 
IFRS 9, 'Financial instruments', effective on or after 1 January 2015, 
addresses the classification, measurement and recognition of financial assets 
and financial liabilities. It replaces the parts of IAS 39 that relate to the 
classification and measurement of financial instruments. IFRS 9 requires 
financial assets to be classified into two measurement categories: those 
measured as at fair value and those measured at amortised cost. The 
determination is made at initial recognition. The classification depends on the 
entity's business model for managing its financial instruments and the 
contractual cash flow characteristics of the instrument. For financial 
liabilities, the standard retains most of the IAS 39 requirements. The main 
change is that, in cases where the fair value option is taken for financial 
liabilities, the part of a fair value change due to an entity's own credit risk 
is recorded in other comprehensive income rather than the income statement, 
unless this creates an accounting mismatch. 
 
 
 
IFRS 10, 'Consolidated financial statements', effective on or after 1 January 
2013, builds on existing principles by identifying the concept of control as 
the determining factor in whether an entity should be included within the 
consolidated financial statements of the parent Company. The standard provides 
additional guidance in the determining the control. 
 
 
 
IFRS 12, 'Disclosures of interests in other entities', effective on or after 1 
January 2013, includes the disclosure requirements for all forms of interests 
in other entities, including joint arrangements, associates, special purpose 
vehicles and other off balance sheet vehicles. 
 
 
 
IFRS 13, 'Fair value measurement', effective on or after 1 January 2013, aims 
to improve consistency and reduce complexity by providing a precise definition 
of fair value, guidance on its application and a single source of fair value 
measurement and disclosure requirements for use across IFRSs. 
 
 
 
1.General information (continued) 
 
 
 
IFRS 11 'Joint Arrangement', effective on or after 1 January 2013, provides for 
a more realistic reflection of joint arrangements by focusing on the rights and 
obligations of the arrangement, rather than its legal form. Proportional 
consolidation of joint ventures is not permitted. 
 
 
 
There are no other IFRSs or IFRIC interpretations that are not yet effective 
that would be expected to have a material impact on the Group. 
 
 
 
2.Segment information 
 
 
 
In accordance with IFRS 8 'Operating Segments', Logica has derived the 
information for its operating segments using the information used by the Chief 
Operating Decision Maker.  The Group has identified the Executive Committee as 
the Chief Operating Decision Maker as it is responsible for the allocation of 
resources to operating segments and assessing their performance. The profit 
measure used by the Executive Committee is the adjusted operating profit, as 
described in Note 4. Operating segments are reported in a manner which is 
consistent with the operating segments produced for internal management 
reporting. 
 
 
 
At 31 December 2011, Logica is organised into six operating segments based on 
the location of assets. Segment revenue and profit after tax are disclosed 
below: 
 
                          Revenue                                              Profit/(loss 
 
               2011                        2010                        2011                        2010 
 
               GBP'm                         GBP'm                         GBP'm                         GBP'm 
 
France         874.7                       810.0                        61.4                        49.2 
 
Northern and   860.4                       787.8                        46.5                        42.6 
Central Europe 
 
United         725.4                       709.4                        15.6                        60.2 
Kingdom 
 
Sweden         622.3                       565.9                      (30.8)                        16.8 
 
Benelux        463.8                       488.0                      (72.4)                        12.5 
 
International  374.7                       335.7                        34.2                        29.3 
 
Revenue and  3,921.3                     3,696.8                        54.5                       210.6 
operating 
profit 
 
Finance costs                                                          (36.1)                      (27.2) 
 
Finance                                                                  13.3                         8.9 
income 
 
Share of                                                                 1.0                         0.6 
post-tax 
profits from 
associates 
 
Taxation                                                                 (5.5)                      (40.8) 
 
Profit after                                                              27.2                       152.1 
tax 
 
 
 
 
The share of post-tax profits from associates in the years ended 31 December 
2011 and 2010 was attributable to the Benelux and the Northern and Central 
Europe segments. 
 
 
 
Adjusted operating profit/(loss) analysis per operating segment was as follows: 
 
 
 
                                                     2011 
 
                           Operating            Exceptional           Amortisation    Adjusted 
                       Profit/(loss)                               of intangibles*   operating 
                                                      items                            profit/ 
                                                                                        (loss) 
 
                                                                                           GBP'm 
                                 GBP'm                    GBP'm                    GBP'm 
 
France                          61.4                      -                   13.0        74.4 
 
Northern and                    46.5                      -                   18.3        64.8 
Central 
Europe 
 
United                          15.6                      -                      -        15.6 
Kingdom 
 
Sweden                        (30.8)                      -                   22.2       (8.6) 
 
Benelux                       (72.4)                      -                      -      (72.4) 
 
International                   34.2                    4.8                    1.0        40.0 
 
                                54.5                    4.8                   54.5       113.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2. Segment information (continued) 
 
 
 
 
 
                                                     2010 
 
                         Operating          Exceptional         Amortisation             Adjusted 
                                                             of intangibles*     operating profit 
                            Profit                items 
 
 
                               GBP'm                  GBP'm                  GBP'm                  GBP'm 
 
France                        49.2                    -                 19.0                 68.2 
 
Northern and                  42.6                    -                 18.5                 61.1 
Central 
Europe 
 
United                        60.2                    -                    -                 60.2 
Kingdom 
 
Sweden                        16.8                    -                 21.1                 37.9 
 
Benelux                       12.5                  1.7                    -                 14.2 
 
International                 29.3                    -                  1.0                 30.3 
 
                             210.6                  1.7                 59.6                271.9 
 
 
* Amortisation of intangible assets initially recognised on acquisition. 
 
 
 
 
 
Other profit and loss disclosures 
 
 
 
                                                     2011 
 
                        Depreciation           Amortisation       Contract charges     Accelerated 
                                       of other intangibles                          restructuring 
                                                                                           charges 
 
                                                                                               GBP'm 
                                 GBP'm                    GBP'm                    GBP'm 
 
France                           6.4                   1.9                     2.7               - 
 
Northern and 
Central 
Europe                          10.9                   4.0                       -             2.1 
 
United 
Kingdom                          6.4                   4.4                    28.0             2.9 
 
Sweden                           5.8                   2.5                       -            31.3 
 
Benelux                          2.6                   0.8                     8.7            57.1 
 
International                   14.5                   4.7                       -               - 
 
                               46.6                   18.3                    39.4            93.4 
 
 
 
 
 
 
                                                     2010 
 
                                         Depreciation             Amortisation 
                                                          of other intangibles 
 
                                                  GBP'm                      GBP'm 
 
France                                            5.8                      1.5 
 
Northern and Central Europe                       9.8                      4.9 
 
United Kingdom                                    5.5                      3.0 
 
Sweden                                            5.3                      1.0 
 
Benelux                                           1.9                      0.5 
 
International                                    14.4                      4.5 
 
                                                 42.7                     15.3 
 
 
 
 
Analysis of revenue by product and 
services 
 
                                                                                                                                                                              2011                         2010 
 
 
                                                      GBP'm                           GBP'm 
 
 
 
Sales of goods                                        196.2                       164.9 
 
Revenue from services                               3,725.1                     3,531.9 
 
                                                    3,921.3                     3,696.8 
 
 
 
 
Outsourcing                                         1,730.6                      1,600.7 
 
Consulting and professional services                2,190.7                      2,096.1 
 
                                                    3,921.3                      3,696.8 
 
 
 
 
Revenue above included GBP2,315.3 million which related to contracts accounted 
for under the percentage-of-completion method (2010: GBP2,151.1 million). 
 
 
 
Analysis of revenue by customer 
 
 
 
No single customer contributes more than 10% of the Group's revenue. 
 
 
 
 
 
 
 
 
 
 
 
 
 
2. Segment information (continued) 
 
 
 
Analysis of total assets 
 
                                                        2011                       2010 
 
                                                         GBP'm                        GBP'm 
 
France                                                 941.3                      941.6 
 
Northern and Central Europe                            749.5                      776.3 
 
United Kingdom                                         531.8                      521.9 
 
Sweden                                                 784.2                      798.9 
 
Benelux                                                182.1                      205.8 
 
International                                          336.4                      299.7 
 
                                                     3,525.3                    3,544.2 
 
Unallocated assets 
 
      Cash and cash equivalents                         89.6                       56.4 
 
      Tax assets                                       108.8                       81.7 
 
      Derivative financial assets                       31.1                        8.7 
 
Total assets                                         3,754.8                    3,691.0 
 
 
 
 
 
 
Analysis of non-current assets 
 
 
 
                                                     2011 
 
                            Goodwill       Other intangible    Property, plant and 
                                                     assets              equipment                  Total 
 
 
                                 GBP'm                    GBP'm                    GBP'm                    GBP'm 
 
France                         563.1                   14.6                   18.6                  596.3 
 
Northern and                   474.8                   35.8                   28.0                  538.6 
Central 
Europe 
 
United                         167.6                   38.5                   33.7                  239.8 
Kingdom 
 
Sweden                         506.2                   63.8                   14.8                  584.8 
 
Benelux                         26.6                    1.8                    6.1                   34.5 
 
International                  145.1                   19.5                   38.5                  203.1 
 
                             1,883.4                  174.0                  139.7                2,197.1 
 
 
 
 
                                                2010 
 
                            Goodwill       Other intangible    Property, plant and 
                                                     assets              equipment                  Total 
 
 
                                 GBP'm                    GBP'm                    GBP'm                    GBP'm 
 
France                         577.5                   27.9                   18.1                  623.5 
 
Northern and                   486.8                   54.4                   23.9                  565.1 
Central 
Europe 
 
United                         167.6                   29.0                   31.9                  228.5 
Kingdom 
 
Sweden                         511.9                   77.6                   16.8                  606.3 
 
Benelux                         27.3                    0.5                    5.9                   33.7 
 
International                  135.4                   11.3                   41.9                  188.6 
 
                             1,906.5                  200.7                  138.5                2,245.7 
 
 
 
 
 
 
3.Exceptional items 
 
 
 
The exceptional items recognised within operating profit were as follows: 
 
 
 
                                                        2011                       2010 
 
                                                         GBP'm                        GBP'm 
 
Acquisition and integration costs                      (4.4)                          - 
Disposal of businesses                                 (0.4)                      (1.7) 
 
                                                       (4.8)                      (1.7) 
 
 
 
 
A charge of GBP4.4 million related to the acquisition and integration of Grupo 
Gesfor business in Spain and Latin America in May 2011 (Note 15). 
 
 
 
In 2010, the Group completed the disposal of its HR Payroll business in the 
Netherlands. The disposal generated a net loss of GBP1.7 million. 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.Adjusted operating profit 
 
 
 
Adjusted operating profit excludes the results of discontinued operations, 
exceptional items and amortisation of intangible assets initially recognised at 
fair value in a business combination, whenever such items occur.  Adjusted 
operating profit is not defined under IFRS and has been shown as the Directors 
consider this to be helpful for a better understanding of the performance of 
the Group's underlying business.  It may not be comparable with similarly 
titled profit measurements reported by other companies and is not intended to 
be a substitute for, or superior to, IFRS measures of profit. 
 
 
 
 
                                                            2011                   2010 
 
 
                                                             GBP'm                    GBP'm 
 
Operating profit                                            54.5                  210.6 
 
Exceptional items (Note 3)                                   4.8                    1.7 
 
Amortisation of intangible assets                           54.5                   59.6 
initially recognised on acquisition 
 
Adjusted operating profit                                  113.8                  271.9 
 
 
 
 
 
 
5.Employee benefit expense 
 
 
 
The number of employees (including executive Directors) was: 
 
                                                  Year end              Average 
 
                                                 2011       2010       2011       2010 
 
                                               Number     Number     Number     Number 
 
France                                          9,353      9,215      9,235      8,982 
 
Northern and Central Europe                     7,068      6,997      7,084      6,961 
 
United Kingdom                                  5,472      5,448      5,542      5,407 
 
Sweden                                          5,158      5,256      5,240      5,222 
 
Benelux                                         4,770      4,901      4,844      5,200 
 
International                                   9,963      7,467      8,953      7,191 
 
                                               41,784     39,284     40,898     38,963 
 
 
 
 
The employee expense for the year 
amounted to: 
 
 
                                                            2011                   2010 
 
 
                                                             GBP'm                    GBP'm 
 
Salaries and short-term employee benefits                1,752.5                1,617.3 
(including bonus) 
 
Social security costs                                      336.5 
                                                                                  310.7 
 
Pension costs                                              139.1                  143.2 
 
Share-based payments                                         7.0 
                                                                                   12.1 
 
                                                         2,235.1                2,083.3 
 
 
 
 
 
 
6.Taxation 
 
 
 
                                                  2011                            2010 
 
                                                   GBP'm                             GBP'm 
 
Current tax: 
 
UK corporation tax                                10.3                            15.7 
 
Overseas tax                                      35.7                            34.5 
 
                                                  46.0                            50.2 
 
Deferred tax: 
 
UK corporation tax                                 5.4                           (1.2) 
 
Overseas tax                                    (45.9)                           (8.2) 
 
                                                (40.5)                           (9.4) 
 
                                                   5.5                            40.8 
 
 
 
 
The effective tax rate on operations for the year, before the share of post-tax 
profits from associates, exceptional items and amortisation of intangible 
assets initially recognised on acquisition, was 23% (2010: 23%), of which a 
charge of GBP15.7 million (2010: GBP14.5 million) related to the United Kingdom. 
 
 
 
The effective tax rate on exceptional items was nil% (2010: 23.5%) and the 
effective tax rate on amortisation of intangible assets initially recognised on 
acquisition was 28.8% (2010: 28.9%). 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.Taxation (continued) 
 
 
 
The tax charge from operations is lower than the standard rate of corporation 
tax in the UK applied to profit before tax.  The differences are explained 
below. 
 
 
 
                                                                                   2010 
                                                       2011 
 
                                                                                    GBP'm 
                                                        GBP'm 
 
Profit before tax                                      32.7                       192.9 
 
Less: share of post-tax profits from                  (1.0)                       (0.6) 
associates 
 
Profit before tax excluding share of                   31.7                       192.3 
post-tax profits from associates 
 
 
 
Tax at the UK corporation tax rate                      8.4                        53.8 
of 26.5% (2010: 28.0%) 
 
Adjustments in respect of previous                      8.7                      (12.3) 
years 
 
Adjustment in respect of foreign tax                   16.9                        11.8 
rates 
 
Tax loss utilisation                                 (21.5)                       (7.1) 
 
Income not subject to tax                             (9.4)                      (16.5) 
 
Deferred tax assets not recognised                      2.4                        11.1 
 
Tax charge                                              5.5                        40.8 
 
 
 
 
The current tax related to exceptional items for the year ended 31 December 
2011 was GBPnil (2010: tax credit GBP0.4 million). 
 
 
 
In addition to the changes in rates of Corporation tax disclosed above a number 
of further changes to the UK Corporation tax system were announced in the March 
2011 UK Budget Statement. Further reductions to the main rate are proposed to 
reduce the 
 
rate by 1% per annum to 23% by 1 April 2014. These further changes had not been 
substantively enacted at the balance sheet date and, therefore, are not 
included in these financial statements. 
 
 
 
 
 
7.Dividends 
 
 
 
The Directors are proposing a final dividend in respect of the year ended 31 
December 2011 of 2.3 pence per share, which would reduce shareholders' funds by 
approximately GBP36.8 million.  The proposed dividend is subject to approval at 
the AGM on 11 May 2012 and has not been recognised as a liability in these 
financial statements.  The final dividend will be paid on 16 May 2012 to 
shareholders on the share register on 13 April 2012. 
 
 
 
The amounts recognised as distributions to equity holders were as follows: 
 
 
 
 
                         2011                2010                   2011                   2010 
 
                          p /                 p / 
                        share               share                    GBP'm                    GBP'm 
 
Interim                                                                                dividend, 
relating                 2.10                1.90                    33.6                  30.3 
to 2011 / 
2010 
 
Final 
dividend, 
relating                 2.30                2.30                    36.6                  36.5 
to 2010 / 
2009 
 
                         4.40                4.20                   70.2                   66.8 
 
 
 
 
Dividends payable to employee share ownership trusts are excluded from the 
amounts recognised as distributions in the table above. 
 
 
 
 
 
 
 
8.Earnings per share 
 
 
 
 
 
                                                               2011 
 
                                                                Weighted 
 
                                               Earnings   average number      Earnings 
                                                               of shares     per share 
 
Earnings per share from continuing                  GBP'm          million         Pence 
operations 
 
Profit for the year from continuing                27.2 
operations 
 
Earnings attributable to ordinary                  27.2          1,597.2           1.7 
shareholders 
 
Basic EPS                                          27.2          1,597.2           1.7 
 
 
 
Effect of share options and share awards              -             41.6             - 
 
Diluted EPS                                        27.2          1,638.8           1.7 
 
 
 
Adjusted earnings per share from continuing 
operations 
 
Earnings attributable to ordinary                  27.2          1,597.2           1.7 
shareholders 
 
Add back: 
 
Exceptional items, net of tax                       4.8                -           0.2 
Fair value adjustment on financial assets/ 
liabilities, net of tax                             1.5                -           0.2 
 
Amortisation of intangible assets initially 
recognised on acquisition, net 
of tax                                             38.9                -           2.4 
 
Basic adjusted EPS                                 72.4          1,597.2           4.5 
 
 
 
Effect of share options and share awards                            41.6             - 
                                                      - 
 
Effect of fair value adjustment on financial      (1.5)                - 
assets/liabilities, net of tax                                                   (0.2) 
 
Diluted adjusted EPS                               70.9          1,638.8           4.3 
 
 
 
 
 
 
                                                  2010 
 
 
                                                   Weighted                Earnings per 
                                   Earnings         average                       Share 
                                                     number 
                                                         of 
                                                     shares 
 
Earnings per                            GBP'm         million                      Pence 
share 
 
Profit for the                        152.1 
year 
 
Earnings                              152.1         1,589.4                         9.6 
attributable to 
ordinary 
shareholders 
 
Basic EPS                             152.1         1,589.4                         9.6 
 
 
 
Effect of share                           -            35.7                       (0.2) 
options and 
share awards 
 
Diluted EPS                           152.1         1,625.1                         9.4 
 
 
 
Adjusted 
earnings per 
share 
 
Earnings                              152.1         1,589.4                         9.6 
attributable to 
ordinary 
shareholders 
 
Add back: 
 
Exceptional                             1.3               -                           - 
items, net of 
tax 
 
Amortisation of                        42.4               -                         2.7 
intangible 
assets 
initially 
recognised on 
acquisition, 
net of tax 
 
Basic adjusted                        195.8         1,589.4                        12.3 
EPS 
 
 
 
Effect of share                           -            35.7                       (0.2) 
options and 
share awards 
 
Diluted                               195.8         1,625.1                        12.1 
adjusted EPS 
 
 
 
 
Adjusted earnings per share, both basic and diluted, have been shown as the 
Directors consider this helpful for a better understanding of the performance 
of the Group's underlying business.  The earnings measure used in adjusted 
earnings per share excludes, whenever such items occur: the results of 
discontinued operations; exceptional items; mark-to-market gains or losses on 
financial assets/ liabilities designated as fair value hedges through profit or 
loss; and amortisation of intangible assets initially recognised at fair value 
in a business combination.  All items adjusted are net of tax where applicable. 
 
 
 
The weighted average number of shares excludes the shares held by employee 
share ownership plan (ESOP) trusts, which are treated as cancelled. 
 
 
 
 
 
9.Reconciliation of movements in net debt 
 
 
 
The Group defines net debt as borrowings, including related derivatives, less 
cash: 
 
 
 
                  At                    Other                                                           At 
                1 January               non-cash                              Exchange             31 December 
                 2011      Cash flows   movements      Aquisitions            differences              2011 
                  GBP'm         GBP'm         GBP'm             GBP'm                   GBP'm                     GBP'm 
 
Cash and 
cash                56.4          51.0      -             (16.7)                    (1.1)                 89.6 
equivalents 
 
Bank               (25.8)        (7.2)      -                  -                       -                 (33.0) overdrafts 
 
                    30.6          43.8      -             (16.7)                    (1.1)                 56.6 
 
Finance            (4.2)           2.4    (0.6)            (0.8)                      0.1                (3.1) 
leases 
 
Bank loans       (216.3)         149.8    (1.7)            (3.6)                    (0.2)               (72.0) 
 
Private 
placement         (88.7)        (187.8)   (17.7)               -                    (3.1)              (297.3) 
debt notes 
 
Other              (1.6)           1.3     (0.1)            (5.5)                     0.1                (5.8) 
borrowings 
 
Derivatives 
in respect          -               -       12.2               -                     14.4                 26.6 
of net debt 
 
Net debt         (280.2)            9.5     (7.9)           (26.6)                    10.2              (295.0) 
 
 
 
 
 
 
10.Borrowings 
 
                                                      2011                        2010 
 
                                                       GBP'm                         GBP'm 
 
Current 
 
Bank overdrafts                                       33.0                        25.8 
 
Bank loans                                             0.2                       175.2 
 
Finance lease obligations                              1.5                         2.7 
 
Other borrowings                                       0.4                         0.6 
 
                                                      35.1                       204.3 
 
 
 
Presented as: 
 
Other borrowings                                      35.1                       204.3 
 
                                                      35.1                       204.3 
 
 
 
Non-current 
 
Bank loans                                            71.8                        41.1 
 
Private placement debt notes                         297.3                        88.7 
 
Finance lease obligations                              1.6                         1.5 
 
Other borrowings                                       5.4                         1.0 
 
                                                     376.1                       132.3 
 
 
 
 
Borrowing facilities 
 
At 31 December 2011, the Group had the following unsecured principal debt 
facilities: 
 
 
 
Bank facilities 
 
a EUR307.5 million revolving credit facility maturing on 26 November 2013.  At 31 
December 2011, EUR36 million (GBP30.0 million) was drawn down under the facility 
(2010: nil). The facility paid interest at an average rate of 2.64% (2010: 
2.67%); 
 
a GBP100 million receivables facility.  The facility matures on 22 July 2015 and 
was undrawn at both 31 December 2011 and 31 December 2010; 
 
a EUR50 million bilateral term loan.  The term loan matures on 26 January 2014. 
The term loan was available from 10th September 2010, and was fully drawn at 31 
December 2011; 
 
a EUR25 million bilateral revolving credit facility maturing on 21 December 
2013.  The facility was undrawn at 31 December 2011 and 31 December 2010; 
 
a EUR25 million bilateral revolving credit facility.  The facility reduces in 
annual increments from 1 August 2013, with a final maturity on 31 July 2016. 
The facility was undrawn at 31 December 2011; 
 
a EUR25 million bilateral revolving credit facility signed 1 July 2011,  maturing 
on 1 July 2016.  The facility was undrawn at 31 December 2011; 
 
a EUR25 million bilateral revolving credit facility signed 6 July 2011,  maturing 
on 6 July 2016.  The facility was undrawn at 31 December 2011; 
 
a EUR30 million bilateral revolving credit facility signed 20 December 2011, 
maturing on 20 December 2016.  The facility was undrawn at 31 December 2011; 
 
a EUR40 million bilateral revolving credit facility signed 21 December 2011, 
maturing on 21 December 2016.  The facility was undrawn at 31 December 2011. 
 
 
 
Since 1 January 2012, the Group signed the following additional unsecured debt 
facilities 
 
a EUR40 million bilateral revolving credit facility maturing on 6 January 2017; 
and 
 
 
 
10.Borrowings (continued) 
 
 
 
a EUR40 million bilateral revolving credit facility maturing on 17 January 
2017. 
 
 
 
Private placement notes 
 
a EUR56.2 million (GBP46.8 million) (2010: GBP48 million) private placement. Tranche 
A EUR18.7 million (GBP16.0 million) matures on 21 April 2015 and pays interest at 
4.5175%, Tranche B EUR18.7 million (GBP16.0 million) matures on 21 April 2016 and 
pays interest at 4.85% and Tranche C EUR18.7 million (GBP16.0 million) matures on 
21 April 2017 and pays interest at 5.2075%; 
 
a GBP40 million private placement. The debt pays interest at 5.26% and matures on 
25 November 2020; 
 
a EUR20 million (GBP16.7 million) private placement signed on 7 July 2011, maturing 
on 7 July 2016  and pays interest at 3.71%; 
 
a $25 million (GBP16.1 million) private placement signed on 7 July 2011, maturing 
on 7 July 2016  and pays interest at 4.27%; 
 
a GBP25 million private placement signed on 7 July 2011, maturing on 7 July 2018 
and pays interest at 4.39%; 
 
a $110 million (GBP71.0 million) private placement signed on 7 July 2011, 
maturing on 7 July 2018  and pays interest at 4.63%; 
 
a $100 million (GBP64.5 million) private placement signed on 7 July 2011, 
maturing on 7 July 2021  and pays interest at 5.06%. 
 
 
 
The obligations of the borrowers listed above are guaranteed by the principal 
UK subsidiary, Logica UK Limited. 
 
 
 
 
 
11.Provisions 
 
 
 
 
 
 
                              Vacant               Restructuring                       Other 
                          properties                                                                          Total 
 
                                                             GBP'm                         GBP'm 
                                 GBP'm                                                                            GBP'm 
 
At 1 January                    31.9                        16.4                        18.2                   66.5 
2011 
 
Charged to                      15.5                        96.1                         3.4                  115.0 
the statement 
of 
comprehensive 
income 
 
Utilised in                    (8.2)                      (28.8)                       (3.5)                 (40.5) 
the year 
 
Unused                         (2.7)                           -                       (1.1)                  (3.8) 
amounts 
reversed 
 
Unwinding of                     1.3                           -                           -                    1.3 
discount 
 
Exchange                           -                       (0.1)                       (0.7)                  (0.8) 
differences 
 
At 31                           37.8                        83.6                        16.3                  137.7 
December 2011 
 
 
 
Analysed as: 
 
Current                                                                                                        90.0 
liabilities 
 
Non-current                                                                                                    47.7 
liabilities 
 
                                                                                                              137.7 
 
 
 
 
Vacant properties 
 
At 31 December 2011, provisions for vacant properties represented residual 
lease commitments, together with associated outgoings, for the remaining period 
on certain property leases, after taking into account sub-tenant arrangements. 
The property costs provided for are mainly related to properties located mainly 
in the United Kingdom, Netherlands, Sweden, and Australia.  At 31 December 
2011, non-current vacant property provisions amounted to GBP25.0 million (2010: GBP 
23.4 million) of which GBP10.2 million was payable between one and two years, GBP 
10.9 million between two and five years, and the balance thereafter. 
 
 
 
Restructuring 
 
At 31 December 2011, the restructuring provision mainly related to the 
restructuring of the businesses announced on 14 December 2011. The 
restructuring programme comprised property rationalisation, a reduction in 
headcount and other measures to reduce the cost base. Where appropriate, 
provisions arising from the property rationalisation are categorised as vacant 
property. At 31 December 2011, GBP73.2 million of the restructuring provision was 
payable within one year, with the remaining balance payable between one and two 
years. 
 
 
 
Other 
 
At 31 December 2011, the other provisions related to the value of legal 
claims.  At 31 December 2011, GBP4.0 million of the other provision was payable 
within one year, with the remaining balance payable between two and five years. 
 
 
 
 
 
12.Share capital 
 
 
 
                            2011                                   2010 
 
Allotted, 
called-up          Number                    GBP'm          Number                    GBP'm 
and fully 
paid 
 
At 1        1,601,941,495                  160.2   1,600,615,806                  160.0 
January 
 
Allotted                                               1,325,689                    0.2 
under                                        1.0 
share          10,032,071 
plans 
 
At 31       1,611,973,566                  161.2   1,601,941,495                  160.2 
December 
 
 
 
 
The Company has one class of issued share capital, comprising ordinary shares 
of 10p each.  Subject to the Company's Articles of Association and applicable 
law, the Company's ordinary shares confer on the holder: the right to receive 
notice of and vote at general meetings of the Company; the right to receive any 
surplus assets on a winding-up of the Company; and an entitlement to receive 
any dividend declared on ordinary shares. 
 
 
 
13.Share premium 
 
 
 
 
                                                           2011                    2010 
 
 
                                                            GBP'm                     GBP'm 
 
At 1 January                                            1,107.4                 1,107.1 
 
Premium on shares allotted under share                      3.2                     0.3 
plans 
 
At 31 December                                          1,110.6                 1,107.4 
 
 
 
 
 
 
14.Reconciliation of operating profit to cash generated from operations 
 
 
 
 
                                                            2011                   2010 
 
 
                                                             GBP'm                    GBP'm 
 
Operating profit from operations                            54.5                  210.6 
 
 
 
Adjustments for: 
 
Share-based payment expense                                  7.0                   12.1 
 
Depreciation of property, plant and                         46.6                   42.7 
equipment 
 
Loss on disposal of non-current assets                       0.8                    2.5 
 
Net movement in provision for impairment                   (0.3)                      - 
of trade receivables 
 
Loss on sale of subsidiaries and disposed                      -                    1.7 
of/held-for-sale businesses 
 
Unrealised foreign exchange differences                    (2.8)                      - 
 
Government grant income                                    (2.6)                      - 
 
Amortisation of intangible assets                           72.8                   74.9 
 
Non-cash element of expense for defined                   (17.6)                  (7.1) 
benefit plans 
 
                                                           103.9                  126.8 
 
 
 
Net movements in provisions                                 70.7                 (52.7) 
 
 
 
Movements in working capital: 
 
Financial assets                                               -                  (0.1) 
 
Inventories                                                  0.2                    0.1 
 
Trade and other receivables                               (27.7)                (116.1) 
 
Trade and other payables                                     3.7                   59.9 
 
                                                          (23.8)                 (56.2) 
 
 
 
Cash generated from operations                             205.3                  228.5 
 
Add back: Cash outflow related to                           18.4                   36.8 
restructuring and integration activities 
 
Add back: Cash outflow related to                            2.7                    4.8 
business acquired/disposed of 
 
Net cash inflow from trading operations                    226.4                  270.1 
 
 
 
 
 
 
15.Acquisitions 
 
 
 
On 24 May 2011 Logica acquired Grupo Gesfor S.A. ("Gesfor"), a privately held 
Spanish consulting and professional services business. Gesfor has around 1,200 
employees and operations in Spain and across Latin America.  Gesfor had 
combined revenues of EUR64 million for the year ended 31 December 2010.  Logica 
invested EUR23.4 million (GBP20.4 million) in cash to acquire these businesses and 
recognised goodwill of EUR15.7 million (GBP13.7 million).  A further payment of up 
to EUR7.5 million will be payable in 2013 depending on future business 
performance. If it is payable, it will be part of net operating costs. 
 
 
 
Full IFRS 3 "Business combinations" disclosures have not been added on the 
grounds of materiality. 
 
 
 
 
 
16.Contingent liabilities 
 
 
 
The size, structure and geographic spread of the Group and its activities 
naturally exposes it to potential scrutiny and possible legal claims including 
tax and other regulatory authorities in the normal course of operations. The 
results of tax audits and other similar enquiries are normally reflected in the 
accounts on an accruals basis where a recovery or liability can be predicted 
with reasonable certainty. Occasionally claims may be levied against the Group 
by such authorities, the outcomes of which cannot be predicted with reasonable 
certainty. While Logica strongly believes it complies with all relevant laws 
and regulations, and would vigorously defend itself against any such claims, if 
it was unsuccessful the enforcement of such claims could from time to time have 
a potentially material impact on the Group's results and financial position. In 
2009, the Group received a EUR46 million, which is net of EUR13 million tax, VAT 
claim from the French tax authorities.  The claim relates to the VAT treatment 
of goods exported from France during the years 2004 to 2006. The Group has 
carefully analysed these claims and obtained external experts' advice, as a 
result of which it considers that they are without merit. The Group is robustly 
contesting these claims through the appropriate channels albeit this is 
expected to be a protracted process. 
 
 
 
 
 
Euro translation of selected financial information (unaudited) 
 
 
 
The Group has presented a translation of the consolidated statement of 
comprehensive income, statement of financial position and statement of cash 
flows into euros to assist users of the financial statements more familiar with 
that currency.  The statement of comprehensive income and statement of cash 
flows in euros have been calculated by converting the consolidated sterling 
figures to euros at an average rate of EUR1.15 to GBP1 (2010: EUR1.17 to GBP1) except 
the opening and closing net cash balance in the statement of cash flow, which 
uses the same rates as used in the statement of financial position as mentioned 
below.  The statement of financial position has been calculated by converting 
the pound sterling figures to euros at the closing rate of EUR1.20 to GBP1 (2010: EUR 
1.17 to GBP1). 
 
 
 
Euro translation of consolidated statement of comprehensive income 
 
For the year ended 31 December 2011 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
. 
 
 
                                                               2011                   2010 
 
 
                                                                EUR'm                    EUR'm 
 
Revenue                                                     4,509.5                4,325.3 
 
Net operating costs                                       (4,446.8)              (4,078.9) 
 
Operating profit                                               62.7                  246.4 
 
Analysed as: 
 
      Operating profit before exceptional                      68.2                  248.4 
items 
 
      Exceptional items                                       (5.5)                  (2.0) 
 
      Operating profit                                         62.7                  246.4 
 
Finance costs                                                (41.5)                 (31.8) 
 
Finance income                                                 15.3                   10.4 
 
Share of post-tax profits from associates                       1.2                    0.7 
 
Profit before tax                                              37.7                  225.7 
 
Taxation                                                      (6.3)                 (47.7) 
 
Net profit for the year                                        31.4                  178.0 
 
 
 
Other comprehensive income/(expense) 
 
Actuarial gains/(losses) on defined                            30.7                  (3.6) 
benefit schemes 
 
Tax on items taken directly to equity                         (8.4)                    0.7 
 
Cash flow hedges                                              (3.7)                      - 
 
Interest rate swaps fair value difference                       0.1                  (0.1) 
 
Exchange differences on translation of                       (62.1)                   13.3 
foreign operations 
 
Other comprehensive income/(expense) for                     (43.4)                   10.3 
the period, net of tax 
 
Total comprehensive income/(expense) for                     (12.0)                  188.3 
the period 
 
 
 
Profit attributable to: 
 
Owners of the parent                                           31.4                  178.0 
 
                                                               31.4                  178.0 
 
 
 
Total comprehensive income/(expense) 
attributable to: 
 
Owners of the parent                                         (12.0)                  188.3 
 
                                                             (12.0)                  188.3 
 
 
 
Earnings per share                                     cents/ share           cents/ share 
 
- Basic                                                         2.0                   11.2 
 
- Diluted                                                       2.0                   11.0 
 
 
 
 
 
 
Euro translation of consolidated statement of financial position (unaudited) 
 
31 December 2011 
 
 
 
See page 32 for basis of translation. 
 
 
 
 
 
 
 
 
 
                                                                                   2010 
                                                       2011 
 
                                                                                    EUR'm 
                                                        EUR'm 
 
Non-current assets 
 
Goodwill                                            2,260.1                     2,230.6 
 
Other intangible assets                               208.8                       234.8 
 
Property, plant and equipment                         167.6                       162.0 
 
Investments in associates                               3.2                         3.2 
 
Financial assets                                       49.7                        14.6 
 
Retirement benefit assets                              62.9                        45.3 
 
Deferred tax assets                                   100.8                        82.3 
 
                                                    2,853.1                     2,772.8 
 
Current assets 
 
Inventories                                             1.0                         1.2 
 
Trade and other receivables                         1,514.4                     1,465.2 
 
Current tax assets                                     29.8                        13.3 
 
Cash and cash equivalents                             107.4                        66.0 
 
                                                    1,652.6                     1,545.7 
 
Current liabilities 
 
Other borrowings                                     (42.0)                     (239.1) 
 
Trade and other payables                          (1,274.2)                   (1,243.0) 
 
Current tax liabilities                             (107.3)                      (77.9) 
 
Provisions                                          (108.0)                      (34.4) 
 
                                                   (1531.5)                   (1,594.4) 
 
 
 
Net current liabilities                               121.1                      (48.7) 
 
Total assets less current                           2,974.2                     2,724.1 
liabilities 
 
 
 
Non-current liabilities 
 
Borrowings                                          (451.3)                     (154.8) 
 
Retirement benefit obligations                       (83.6)                     (111.4) 
 
Deferred tax liabilities                             (55.3)                      (71.5) 
 
Provisions                                           (57.2)                      (43.4) 
 
Other non-current liabilities                         (7.0)                       (1.6) 
 
                                                    (654.4)                     (382.7) 
 
Net assets                                          2,319.8                     2,341.4 
 
 
 
Equity 
 
Share capital                                         193.4                       187.4 
 
Share premium account                               1,332.7                     1,295.7 
 
Reserves                                              793.7                       858.2 
 
Total shareholders' equity                          2,319.8                     2,341.3 
 
Non-controlling interests                                 -                         0.1 
 
Total equity                                        2,319.8                     2,341.4 
 
 
 
 
 
 
Euro translation of consolidated statement of cash flows (unaudited) 
 
For the year ended 31 December 2011 
 
 
 
See page 32 for basis of translation. 
 
 
 
 
                                                       2011                        2010 
 
                                                        EUR'm                         EUR'm 
 
Cash flows from operating 
activities 
 
Net cash inflow from trading                          260.4                       316.0 
operations 
 
Cash outflow related to                              (21.1)                      (43.1) 
restructuring and integration 
activities 
 
Cash outflow related to                               (3.1)                       (5.6) 
business acquired/disposed of 
 
Cash generated from                                   236.2                       267.3 
operations 
 
Finance costs paid                                   (24.7)                      (23.4) 
 
Income tax paid                                      (41.8)                      (59.6) 
 
Net cash inflow from                                  169.7                       184.3 
operating activities 
 
 
 
Cash flows from investing 
activities 
 
Finance income received                                 7.8                         4.4 
 
Dividends received from                                 1.2                         0.5 
associates 
 
Proceeds on disposal of                                 0.3                         0.2 
property, plant and equipment 
 
Purchases of property, plant                         (57.2)                      (53.5) 
and equipment 
 
Expenditure on intangible                            (33.6)                      (33.7) 
assets 
 
Purchase of non-controlling                           (0.1)                           - 
interests 
 
Acquisition of subsidiaries                          (19.2)                      (10.4) 
and other businesses, net of 
cash acquired 
 
Proceeds on disposal of                                   -                         3.7 
subsidiaries and other 
businesses, net of cash 
disposed 
 
Net cash outflow from                               (100.8)                      (88.8) 
investing activities 
 
 
 
Cash flows from financing 
activities 
 
Proceeds from issue of shares                           4.1                         0.5 
allotted under share plans 
 
Refund of expenses related to                             -                         6.6 
shares issued in prior years 
 
Proceeds from bank borrowings                          34.5                       270.1 
 
Repayments of bank borrowings                       (206.8)                     (467.8) 
 
Proceeds from private                                 216.0                       104.0 
placement debt notes, net of 
issuance cost 
 
Repayments of finance leases                          (2.8)                       (4.0) 
 
Repayments of other                                   (1.5)                       (0.8) 
borrowings 
 
Net proceeds from forward                             (0.5)                      (20.7) 
contracts 
 
Dividends paid to the                                (80.7)                      (78.2) 
Company's shareholders 
 
Net cash outflow from                                (37.7)                     (190.3) 
financing activities 
 
 
 
Net increase/(decrease) in                             31.2                      (94.8) 
cash, cash equivalents and 
bank overdrafts 
 
 
 
Cash, cash equivalents and                             35.8                       124.4 
bank overdrafts at the 
beginning of the year 
 
Net increase/(decrease) in                             31.2                      (94.8) 
cash, cash equivalents and 
bank overdrafts 
 
Effect of foreign exchange                              0.9                         6.2 
rates 
 
Cash, cash equivalents and                             67.9                        35.8 
bank overdrafts at the end of 
the year 
 
 
 
 
 
 
 
 
 
 
 
 
END 
 

(END) Dow Jones Newswires

February 22, 2012 02:00 ET (07:00 GMT)