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Atos first quarter revenues up 2.4%

Thierry Breton - Atos CEO

Paris: Atos, the global IT services consultancy, yesterday announced a slight increase in revenue in its first quarter to March 31 2012, despite weakness in France, Benelux and Iberia.

First quarter 2012 revenue:

  • Revenue: EUR 2,163 million
  • Organic growth: +2.4 per cent
  • Book to bill: 107 per cent
  • Positive net cash: EUR 34 million
  • 2012 Objectives confirmed

First quarter revenue was EUR 2,163 million, representing organic growth of +2.4 per cent compared with the first quarter of 2011.

Thierry Breton, Chairman and CEO, said, "The first quarter showed a good start of the year confirming an expected solid year 2012. Revenue again grew more than 2 per cent thanks to our strategy following the acquisition of SIS to focus on strengthening our recurring activities. As we committed, the Group is cash positive for the first time since its creation. I am also glad that we finalized the alliance with EMC and VMware to create Canopy, which positions Atos as one of the leading global players in cloud services."

Revenue performance by Service Line

In EUR Million Q1 2012 Q1 2011 % growth
Managed Services 995 958 +3.9%
Systems Integration 536 536 +0.0%
HTTS & Specialized Businesses 474 460 +2.9%
Consulting & Technology Services 158 159 -0.4%
Total Group 163 112 +2.4%

Managed Services, which represents 46 per cent of the Group, had revenue of EUR 995 million, up +3.9 per cent compared to the first quarter of 2011. Growth was driven by several geographies including Germany (+6 per cent), North America (+7 per cent), Central & Eastern Europe (+10 per cent) and the UK (+3 per cent). In Benelux and Iberia, revenue was almost stable despite the continued tough market conditions. Revenue in France was down -6 per cent year-on-year but returned to growth sequentially compared with the third and the fourth quarter of 2011. Following the acquisition of SIS, the Service Line has been able to grow by signing multi-year contracts with new customers.

In Systems Integration revenue was stable compared with the first quarter of 2011 at EUR 536 million. The start of the year was better than anticipated. The activity grew in Germany, North America, North & South Western Europe and Latin America. Revenue in Benelux showed a further decline due to the continued difficult market conditions. In France, as planned, actions initiated last year to turnaround and to improve the situation are now being implemented.

Hi-Tech Transactional Services & Specialized Businesses (HTTS & SB) revenue was EUR 474 million, up +2.9 per cent year-on-year. HTTS business grew by +5.7 per cent mainly driven by e-CS revenues at +14.9 per cent.

For Consulting & Technology Services, which represent 7 per cent of the Group, revenue was stable compared with the first quarter of 2011 at EUR 158 million. In Consulting, utilization rate was 72 per cent compared to 70 per cent for full year 2011 and stable at 84 per cent for Technology Services. The increased activity in Technology Services in France (+9 per cent) mainly for Public Sector, and in Consulting in the UK, offset the decline of the Service Line in the Netherlands (-8 per cent) in Financial Services and Manufacturing sectors.

Revenue performance by Group Business Unit (GBU)

In EUR Million Q1 2012 Q1 2011 % growth 
Germany 418 394 +6.1%
United-Kingdom & Ireland 390 369 +5.8%
Benelux 248 262 -5.2%
France 255 259 -1.6%
Atos Worldline 226 222 +1.8%
North America 134 124 +8.4%
Central and Eastern Europe 130 128 +1.2%
North & South West Europe 99 94 +5.5%
Iberia 82 85 -4.2%
Other BUs 181 176 +2.7%
Total Group 163 112 +2.4%

For the third quarter in a row, the growth was driven by most of the GBUs, and in Europe primarily by the Northern, Central and Eastern geographies.

In Germany, revenue was EUR 418 million, representing a growth of +6.1 per cent. Managed Services strong growth came from the ramp-up of new contracts signed in 2011 and higher business volumes in the Manufacturing sector. In Systems Integration, revenue grew by +4.9 per cent with additional projects which more than compensated the phase out of the Application Management contract with a large German Bank.

In the United Kingdom & Ireland, revenue was EUR 390 million, up +5.8 per cent. Managed Services was up +3.1 per cent due to increased volumes and to the start of delivering new deals won in the fourth quarter of 2011. Systems Integration grew +1.3 per cent. HTTS & SB grew +10.2 per cent due to higher project revenue and volumes notably in the Transport sector.

In Benelux, revenue in the first quarter was EUR 248 million, down -5.2 per cent. In Managed Services, the activity was almost flat thanks to Financial Services in the Netherlands and new clients in Belgium. Difficult market conditions, price pressure and lower volumes continued to affect both Systems Integration and Consulting & Technology Services. The GBU remains focused on margin protection by improving workforce management.

Revenue in France was EUR 255 million, representing an organic decline limited to -1.6 per cent year-on-year, following -6 per cent in the third quarter of 2011 and -4 per cent in the fourth quarter of 2011. In Managed Services, the activity was stabilized compared to the fourth quarter of 2011 thanks to increased business in Energy & Utilities and stable volumes in Financial Services. Technology Services grew by +9 per cent year-on-year with an improved utilization rate above of 84 per cent. In Systems Integration, revenue was down in Manufacturing (automotive industry) and with mobile phone operators.

Revenue for Atos Worldline was EUR 226 million up +1.8 per cent year-on-year. Payment activities were stable due to lesser volume growth in the credit card business in Belgium. eCS was up +8.9 per cent with additional project revenue and hardware sales in France. Financial Market division was stable year-on-year.

In North America (NAM) revenue was EUR 134 million, up +8.4 per cent. Managed Services revenue was up +6.6 per cent following stronger activity with large manufacturing companies. Systems Integration reported a solid growth thanks to an increase of business in Financial Services.

In Central & Eastern Europe (CEE) revenue was EUR 130 million, up +1.2 per cent. Managed Services revenue increased +9.7 per cent thanks to higher volumes in several countries including Turkey and Czech Republic. Systems Integration was down -9.0 per cent. The decline was due in part to less discretionary spending in the Public sector in several countries. It was also due to a one-time hardware sale in Austria in the first quarter of 2011.

In North & South West Europe (N&SWE) revenue was EUR 99 million, up +5.5 per cent. The GBU had a strong growth both in Managed Services and Systems Integration, respectively up +9.2 per cent and +15.2 per cent. The increase materialized primarily in the Manufacturing sector and overcompensated less hardware revenue in the Civil & National Security business compared to the same quarter last year.

In Iberia, revenue was EUR 82 million, down -4.2 per cent. While Systems Integration, thanks to the Telco sector, and Managed Services reported stable revenue, Consulting & Technology Services suffered from the economic conditions mainly in Public Sector and Financial Services.

Outlook

The Group confirms all its objectives for 2012 as stated in February:

  • Revenue — In the current economic environment, the Group expects a slight revenue organic growth compared to proforma 12 months 2011.
  • Operating margin -Thanks to the continued integration of SIS and the roll out of the TOP Program, the Group has the objective to improve its operating margin rate to 6.5 percent of revenue compared to 4.8 percent for proforma 12 months 2011.

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