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Business Management

First quarter of 2020 – Atos

A resilient profile and a robust harmony sheet to encounter an unprecedented predicament Earnings at € two,834 million -.eight% organic advancement E-book to monthly bill ratio at 103% Renewals of important contracts in North The usa Suitable organization combine to support shoppers in Covid-19 context Vital price actions becoming implemented to shield running margin SPRING […]

A resilient profile and a robust harmony sheet to encounter an unprecedented predicament

Earnings at € two,834 million

-.eight% organic advancement

E-book to monthly bill ratio at 103%

Renewals of important contracts in North The usa

Suitable organization combine to support shoppers in Covid-19 context

Vital price actions becoming implemented to shield running margin

SPRING transformation application to an Market solution well on keep track of

Update of 2020 goals publish Covid-19

 

Paris, April 22, 2020,

Atos, a global chief in electronic transformation, now announces the earnings of its first quarter of 2020.

Elie Girard, CEO, claimed: “In this unprecedented ecosystem wherever uncertainty prevails, our first precedence has been to shield our workforce although presenting whole continuity of assistance to our customers. The Team is solidly positioned to navigate effortlessly by way of the disaster many thanks to deep client associations across all industries, a resilient organization combine and a sturdy harmony sheet that supplies a robust money overall flexibility.

Our 110,000 colleagues across the planet have furnished an instant and exceptional reaction to customers’ problems and need for support by way of our “Always Ready” application created now due to the fact the starting of the year. Now our minds and efforts are turning to the publish-Covid situations, actively making ready for the “new normal” which will see an acceleration in precise customers’ requires, specifically information platforms, cybersecurity, cloud migration, electronic place of work and decarbonization.

We revise now our goals for 2020 demonstrating the resilience of the Team and the willingness to share any influence reasonably across stakeholders. I am persuaded that Atos will arise from this global disaster much better than ever and ready to go ahead to the subsequent action.”

Q1 2020 revenue was € 2,834 million, down -.eight% organically. In the context of Covid-19 disaster and limits and lockdowns in March in most of the international locations wherever the Team operates, earnings decreased only marginally many thanks to the resilient profile of its companies centered on multi-year contracts put together with its good organization in Huge Knowledge and Cybersecurity. What’s more, and in spite of the disaster, the Team accelerated its industrial dynamism with get entry at € 2,908 million top to a book to monthly bill ratio of 103%, considerably up as opposed to past year at 86%.

Q1 2020 earnings performance by Market

In € million Q1 2020 Q1 2019* Organic and natural
evolution
Producing 539 555 -two.nine%
Fiscal Providers & Insurance 527 542 -two.6%
Public Sector & Protection 584 566 +three.two%
Telecom, Media & Engineering 443 439 +.eight%
Sources & Providers 418 416 +.4%
Healthcare & Lifestyle Sciences 323 340 -4.nine%
Full Team two,834 two,858 -.eight%
* At continuous scope and exchange premiums

 

Producing achieved € 539 million of earnings, down -two.nine% at continuous scope and exchange premiums. The Market benefitted from a good performance in Automotive with the ramp-up of a German auto corporation and Rheinmetall on information administration contracts, compensating the influence in Daimler owing to Covid-19 and the ramp down of PSA. Conversely, Producing was impacted by lessen volumes with Siemens, a slowdown in the Aerospace sector owing to Covid-19, and several shifts of gear sales towards the finish of the quarter.

Fiscal Providers & Insurance earnings was € 527 million in the first quarter 2020, down by -two.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as well as the progress of activity with a payment corporation in France which have a lot more than compensated for the reduction of volumes from banking establishments in Central Europe. Escalating markets suffered from non-repeated sales done past year in APAC and Center East & Africa. In North The usa, project centered routines reduce now noticed in previous quarters was accelerated in March owing to conclusions from several Fiscal Providers firms to postpone or minimize discretionary bills in the context of Covid-19.

Public Sector & Protection earnings was € 584 million, up +three.two% at continuous scope and exchange premiums. The advancement was pushed by the robust performance recorded in Northern Europe, many thanks to the continuation of the agreement with European Heart for Medium selection Weather forecast as well as with EU Lisa and good information system in Benelux. North The usa accomplished stability despite lessen volumes, many thanks to further sales on current contracts. The predicament was a lot more challenging in Southern Europe, impacted by the ramp-down of Large Effectiveness Computing activity as well as non-repeated sales done past year. Central Europe was negatively impacted by lessen volumes, and ultimately Escalating Markets was impacted by earnings recorded past year for the Tokyo Olympic Game titles preparing and not repeated this year.

Telecom, Media & Engineering achieved € 443 million, up +.eight% organically, with a contrasted performance by geography and by activity. Large Tech & Engineering posted a robust advancement, pushed by Unified Conversation & Collaboration choices in Central Europe, sustained by organic advancement of freshly obtained corporation Maven Wave in North The usa and agreement ramp-up with a significant husband or wife, as well as further sales in Southern Europe. Media improved as well, benefitting from new organization progress, coupled with larger volumes with current shoppers in North The usa. Telecom activity was generally impacted by some ramp-downs in Southern Europe.

Earnings in Sources & Providers achieved € 418 million and improved by +.4% organically. Company in Energy & Utilities sector fueled the advancement. In distinct, the Market sent a Large Effectiveness Laptop in South The usa. Digital place of work services ramped-up with a important Energy supplier in North The usa and with National Grid in Northern Europe. The predicament in Retail, Transportation & Hospitality sectors was a lot more challenging in the context of Covid-19. Certainly, although the ramp-up of a new IoT agreement signed in the spot of predictive servicing benefitted to North The usa, the Market faced quantity reductions in Europe.

Healthcare & Lifestyle Sciences earnings was € 323 million, down by -4.nine% as opposed to Q1 2019, impacted by quantity reductions on really precise contracts in both North The usa and Northern Europe, although the market benefitted from the ramp-up of a global agreement with Bayer and a electronic place of work agreement signed past year in Central Europe, and the ramp-up of an Australian Public Agency agreement in Escalating Markets. Southern Europe benefitted from a robust activity in electronic initiatives and Large Effectiveness Computing.

 

Q1 2020 earnings performance by Regional Company Device

 

In € million Q1 2020 Q1 2019* Organic and natural
evolution
North The usa 681 699 -two.6%
Northern Europe 698 696 +.three%
Southern Europe 594 609 -two.6%
Central Europe 667 660 +one.%
Escalating Markets 194 192 +one.%
Full Team two,834 two,858 -.eight%
* At continuous scope and exchange premiums

The first quarter of 2020 confirmed various earnings evolution by Regional Company Units which can be summarized as follows:

  • In North The usa, earnings achieved € 681 million, lowering by -two.6% organically generally coming from Covid-19 brought about project stops and quantity reductions in several Industries. The Company Device accomplished advancement in Telecom, Media & Engineering and Sources & Providers many thanks to new brand, larger volumes and ramp up of current contracts
  • In Northern Europe, earnings was roughly secure at € 698 million. Strong organization was recorded in Public Sector & Protection generally led by the continuation of the HPC agreement with European Centre for Medium Variety Weather Forecast, as well as by deliveries to European Union Institutions. Telecom, Media & Engineering and Manufacturing faced some contracts ending and Healthcare & Lifestyle Sciences a reduction on Company Approach Outsourcing contracts
  • In Southern Europe, earnings achieved € 594 million, lowering by -two.6% Healthcare & Lifestyle Sciences posted a double-digit advancement many thanks to electronic initiatives sent and Large Effectiveness Computing routines. The geography was impacted by non-repeated sales also on Large Effectiveness Computing routines done past year in several Industries
  • In Central Europe, the geography improved organically by +one.% top to a € 667 million Producing benefitted from several ramp-up of infrastructure contracts and further initiatives. Earnings in Telecom, Media & Engineering also improved, pushed by Unified Conversation & Collaboration organization. Healthcare & Lifestyle Sciences posted a double-digit advancement generally fueled by new contracts. Public Sector & Protection was impacted by non-repeated sales and initiatives accomplished past year although new initiatives in SAP HANA and in Digital had been done in Germany and in Austria. Last but not least, Sources & Providers was impacted by a lessen need in Unify Conversation channels
  • Escalating Markets achieved € 194 million earnings, +one.% Producing posted a good advancement, pushed by a larger stage of sales as well as much better need in electronic initiatives generally in Asia-Pacific and South The usa. Earnings in Source & Providers strongly improved fueled by Large Effectiveness Computing activity in South The usa although the predicament was a lot more challenging in Fiscal Providers generally in Asia Pacific.

Q1 2020 earnings performance by Division

 

In € million Q1 2020 Q1 2019* Organic and natural
evolution
Infrastructure & Knowledge Management one,558 one,566 -.five%
Company & System Solutions one,016 one,069 -4.nine%
Huge Knowledge & Cybersecurity 259 223 +16.three%
Full Team two,834 two,858 -.eight%
* At continuous scope and exchange premiums

In Infrastructure & Knowledge Management (IDM), earnings was € 1,558 million, -.five% organically. The Division ongoing to roll-out its transformation model by extending Hybrid Cloud Orchestration as well as rising Digital Workplace implementation.

The precise predicament owing to Covid-19 pandemic required a good organization continuity for essential infrastructures for its shoppers. Certainly, the Division recorded a robust need on Digital Workplace remedies (accessing applications from anywhere), company conversation choices with Unified Collaboration & Conversation, community connections, and many others. These routines are connected to the distant performing that has been place in location by a lot of companies to encounter the lockdown and retain their activity.

Last but not least, in the current context, the Division recorded less earnings generated by gear sales and fertilization in current contracts in March.

In Company & System Solutions (B&PS) earnings was € 1,016 million, -4.nine% organically. As a reminder, the Division was down -one.two% in Q4 2019 owing to the headwinds in Fiscal Providers in North The usa as well as in Automotive market in Germany, and for that reason did not anticipate any advancement in the starting of 2020 even before Covid-19.

In the new context of Covid-19, the Division had to encounter a slowdown in most of the Industries. Certainly, this organization section is considerably a lot more dependent from the cycle and shoppers began in March to postpone discretionary initiatives. The Team considers that the most impacted routines will be Engineering Experienced Providers demanding engineers performing on purchaser web sites, that can not be done on a distant method (circa 30% of Company & System Solutions earnings). On the reverse, Application Growth and Upkeep, centered on prolonged term contracts need to be resilient (circa 40% of Company & System Solutions earnings). In in between, a significant portion of essential Digital Initiatives (circa 30% of Company & System Solutions earnings) can be done on a distant method, but the quantity of the organization will count in the subsequent months from the purchaser demands on new initiatives.

The organization in Huge Knowledge & Cybersecurity (BDS) remained robust with earnings up +16.three% organically at € 259 million in the first quarter of 2020. In the current context, the distant performing as well as the increase of cyberattacks led companies to boost the protection of their infrastructure and information. As examples, shoppers requested for a lot more remedies of identification in rapid method, and consulting on the solidity of their protection infrastructure.

In Huge Knowledge, there was no discontinuity in the source chain many thanks to pro-active stock administration. The need continues to be robust in Large Effectiveness Computing. As an example, distant entry to SAP HANA involves further processing power and for that reason much larger requires of Sequana S in-memory servers. Last but not least, Mission Significant Procedure organization also recorded a higher earnings advancement.

Professional activity

In the course of the first quarter of 2020, the Team get entry achieved € 2,908 million symbolizing a E-book to Monthly bill ratio of 103%, as opposed to 86% accomplished over the exact interval past year.

The principal new contracts signed over the interval had been notably in North The usa with a significant American corporation in Protection Sector (Telecom, Media & Engineering), in Central Europe with Norddeutsche Landesbank (Fiscal Providers & Insurance) and a global european pharmaceutical corporation (Health and fitness & Lifestyle Sciences) and in Southern Europe with a important utility in France and with Ile-de-France Mobilités (Sources & Providers), as well as with a French banking institution (Fiscal Providers & Insurance).

Contract renewals of the quarter integrated significant signatures with notably the first portion of the renewal of Texas Section of Information Sources agreement (Public Sector & Protection), the renewal of Conduent agreement (Telecom, Media & Engineering) in North The usa, a agreement with a Worldwide European organization in money goods for SAP HANA (Producing) in Central Europe, as well as with the French UGAP (Public Sector & Protection) in Southern Europe.

In line with this dynamic industrial activity, the whole backlog amounted to € 22.one billion at the finish of March 2020, symbolizing one.nine year of earnings. The whole experienced pipeline achieved € 7.6 billion, symbolizing 7.eight months of earnings.

Human sources

The overall headcount was 108,602 at the finish of March 2020, broadly secure as opposed to 108,317 at the finish of December 2019.

In the first quarter of 2020, the Team employed five,043 employees, generally in offshore international locations.

How Atos handles Covid-19 influence

Given that finish of January, the Team administration, supported by Team Human Sources, has been focusing on the health and fitness and safety of workforce although making sure a correct implementation of pre-defined organization continuity options in every Division.

The Team also activated the “Always Ready” application, pulling collectively all Team remedies precisely adapted to this distressed predicament and becoming proactively supplied to shoppers to help them go by way of the disaster: support to generalized homeworking which include collaboration functions, precise support to general public & health and fitness establishments, reinforcement of cybersecurity protections, and many others. Customers’ responses and fulfillment with regards to Atos teams reactivity has been overwhelmingly constructive. Atos is also concerned into quite a few governmental initiatives across the planet to fight towards the virus, and get ready the progressive relief of limits and lockdowns.

To shield its running margin, the Team has taken robust actions on its price foundation in the following parts:

  • Strong centralized checking of personnel fees (using the services of freeze, cancellation of salary raises, influence on variable compensation, holidays, and many others.)
  • Alternative of subcontractors by own freed up employees
  • Cancellation of non purchaser connected discretionary bills
  • Strong saving application on non personnel fees.

In overall, the Team launched a application symbolizing a overall quantity of c. four hundred million euros of savings in 2020.

Up to date 2020 goals publish Covid-19

As the 2020 goals disclosed on February 19, 2020 had been pre Covid-19 outcome, the Team updates now its a few goals for the whole year 2020, centered on the current macroeconomic state of affairs of a progressive recovery over H2 2020 and 2021, as well as the management’s day-to-day discussions with Team shoppers:

  • Earnings organic evolution: in between -two% and -4% (versus c. +two% pre Covid-19)
  • Operating margin price: nine% to nine.five% of earnings (versus +twenty bps to + 40 bps above 2019 (ten.three% noted) pre Covid-19)
  • Free of charge funds circulation: € .five billion to € .6 billion (versus c. € .7 billion pre Covid-19)[*].

The Team suspends its targets for 2021, the past year of the a few-year prepare offered at the Investor Working day held on January 30, 2019. The Team will present its eyesight as well as its mid-term targets at the 2020 Analyst Working day (date to be rescheduled).

Postponement of Yearly Common Assembly and extraordinary cancellation of dividend payment in 2020

Due to the extraordinary conditions connected to the Covid-19, the Board of Administrators, which achieved on March 31, 2020, has determined to postpone the Yearly Common Assembly at first scheduled on May perhaps fourteen, 2020 to June 26, 2020.

In these unprecedented conditions, for the duration of its session on April 21, 2020, the Board of Administrators took the extraordinary selection not to suggest the one.40 euro for each share dividend which was at first considered to be submitted to the Yearly Common Assembly. In addition, the Main Govt Officer as well as other users of the Common Management Committee have determined to minimize by 30% their compensation for the duration of the current a few-month interval from March to May perhaps 2020. The Chairman of Atos’ Board of Administrators has built the exact selection.

The Team confirms that the cancellation of the dividend this year is an exception to its dividend policy with a spend-out ratio in between twenty five% and 30% of Internet cash flow Team share.

 

Appendix

Earnings at continuous scope and exchange premiums reconciliation

In € million Q1 2020 Q1 2019 % improve
Statutory earnings two,834 two,818 +.6%
Trade premiums outcome 26  
 
Earnings at continuous exchange premiums two,834 two,843 -.three%
   
Scope outcome fourteen  
Trade premiums outcome on obtained/disposed perimeters one  
Earnings at continuous scope and exchange premiums two,834 two,858 -.eight%
       

Scope effects amounted to €+fourteen million for earnings and are generally connected to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+18 million), the acquisition of IDnomic, consolidated as of Oct one, 2019 (three months for €+4 million), the acquisition of X-PERION, consolidated as of December one, 2019 (three months for €+two million), the disposal of some precise Unified Conversation & Collaboration routines generally in Q1 2020 (overall restatement of €-4 million) as well as former ITO routines in the United kingdom starting of H2 2019 (three months for €-4 million), and ultimately the disposal and decommissioning of non-strategic routines within CVC.

Currency exchange premiums effects generally arrived from the American dollar as well as the British pound and positively contributed to earnings for €+26 million.

 

Convention simply call

Today, Wednesday, April 22, 2020, the Team will maintain a convention simply call in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in get to remark on Atos’ Q1 2020 earnings and reply concerns from the money group.

You can join the webcast of the convention:

  • on net, in the Investors area
  • by smartphones or tablets by way of the scan of:
  • by phone with the dial-in, five-ten minutes prior the starting time:
    • France             +33 one 70 70 07 81       code 12652364
    • Germany             +forty nine 69 2222 2625       code 12652364
    • United kingdom             +forty four 844 481 9752       code 12652364
    • US             +one 646 741 3167         code 12652364
    • Other international locations +forty four 2071 928338        code 12652364

Just after the convention, a replay of the webcast will be out there on atos.net, in the Investors area.

 

Forthcoming functions

June 26, 2020              Yearly Common Assembly

July 27, 2020               First fifty percent 2020 benefits

Oct 22, 2020         Third quarter 2020 earnings

To be scheduled            2020 Analyst Working day