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HP and Atos figures underline challenges.

Thierry Breton - Atos CEO
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Paris and Palo Alto: Financial results from two of the world's biggest IT consulting operations released yesterday underline just how challenging the global climate for consulting remains.

Hewlett Packard, the world's largest IT company, suffered an 8% year-on-year decline during the first quarter of the current financial year after a collapse of personal computer sales. IT Services was one of its few growth areas — but even that business was up just 1% to $8.6 billion.

Atos, now Europe's largest IT services company, saw revenues up 36% to EUR 6.8 billion last year, but without its acquisition of Siemens' IT services business it grew by just 0.3%. The UK and Germany proved its strongest performers*.

"Frankly, it was a tough quarter, and every business had its challenges," Hewlett Packard CEO Meg Whitman told investment analyts. HP Services revenue of $8.6 billion grew 1% year over year with a 10.5% operating margin. Technology Services revenue grew 2%, Application and Business Services revenue was flat and IT Outsourcing revenue grew 2%.

In Paris, Thierry Breton, Atos Chairman and CEO, told a much more upbeat story.

"In 2011, as in previous years, we achieved all our objectives. The Atos Group revenue returned to organic growth and thanks to a very good execution of its plans, it also achieved 6.2 percent operating margin rate, higher than the initial guidance of 6.0 percent. Free cash flow was over 36 percent compared to last year. 2011 marked a turning point in our history, when, following the acquisition of Siemens IT Solutions and Services, Atos became a European IT champion. We are now even better positioned to reach our 2013 targets thanks to the ramp up of our transformation program, TOP, and our new eXpand project for business growth. We believe 2012 will be a solid year," he said.

Revenue, which includes 6 months revenue from SIS acquired on July 1st, 2011, was EUR 6,812 million, representing +0.3 percent organic growth compared to 2010 revenue at constant scope and exchange rates. Organic growth was +2.2 percent in the fourth quarter. Book-to-bill ratio was 103 percent in 2011 with a strong increase in the fourth quarter at 113 percent.

Operating margin was EUR 422.4 million, representing 6.2 percent of revenue compared to 4.3 percent in 2010 at constant scope and exchange rates. The Group generated EUR 194 million of free cash flow, leading to a net debt of EUR 142 million at the end of 2011. Net income Group share stood at EUR 182 million compared to EUR 116 million in 2010.

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