ATOS :2012 Annual Results
(Thomson Reuters ONE Via Acquire Media NewsEdge)
All objectives reached in 2012
Operating margin strongly improved by +36 percent: EUR 580 million at 6.6
Statutory revenue: EUR 8,844 million; up +30 percent
Free cash flow: EUR 259 million; net cash: EUR 232 million,
Net income: EUR 224 million; +23 percent
Record commercial activity
EUR 10 billion order entry; book to bill ratio: 113 percent
Decision to proceed with the carve-out of payment and merchant transactional
2013 Objectives: strong increase in operating margin and free cash flow
Paris, 21 February 2013 - Atos, an international information technology services
company, today announced its 2012 annual results.
Thierry Breton, Chairman and CEO at Atos said: "In 2012, we continued to create
a European competitive company with global reach. We invested to deliver
innovation and enhance our partnerships in key areas such as cloud services,
enterprise social networks, e-payments,... The Board of Directors expressed its
great satisfaction on our overall performance in 2012, which was the first full
year of the new Atos SE. Despite the continued volatility in the global economic
environment, we reached all our financial objectives thanks to our strong
discipline in execution. Looking ahead, the company remains well-positioned to
continue delivering significantly value for our customers and shareholders and
in this context I am glad to announce the decision to carve-out payment and
merchant transactional activities by mid-2013."
Strong commercial activity throughout the year, led to a record order entry at
EUR 10 billion. This represents a book to bill ratio at 113 percent thanks to
major bookings in Managed Services and in BPO, and at the end of the year in
Systems Integration. The book to bill ratio for the Group was 118 percent
excluding the Siemens account, for which the backlog already includes the
majority of the Global IT contract.
Revenue was EUR 8,844 million, up +29.8 percent compared to 2011 on published
revenues, representing an organic growth of +0.8 percent. The four largest
Business Units are Germany and the UK with 19 percent of total revenue each, and
Benelux and France with 11 percent each.
Operating margin was EUR 580.0 million, representing 6.6 percent of revenue
compared to 4.8 percent in pro forma figures of 2011.
The Group generated in 2012 EUR 259 million of free cash flow. Net cash position
was EUR 232 million at the end of 2012.
Net income Group share stood at EUR 224 million compared to EUR 182 million in
A new strategic step for Atos: carve-out of payment and merchant transactional
The Group announces today the decision to carve-out Atos payment and merchant
transactional activities around Atos Worldline and specific transactional
businesses, which is expected to be finalized by mid-2013. The defined scope is
estimated to have generated revenue of EUR 1.1 billion in 2012, up +5 percent
with an operating margin rate of 15 percent.
The carve-out will reveal this new entity as worldwide player and European
leader in the payment space with a more integrated and efficient management of
operations. It will provide the strategic and financial flexibility to expand
its product offerings across the entire transaction value chain including
alliances and partnerships. This will result in reaffirming this new entity's
leading position in the payment sector, which is also enhanced by the ability to
leverage on the large and strong Atos customer base and geographical presence.
Grouping all payment activities within a single defined perimeter with specific
reporting will also enable increased internal and external transparency on this
business performance while strengthening the operational performance of the new
Atos payment and merchant transactional activities will be ideally positioned to
act as a leader in the fast growing and constantly evolving European payment
The Group has already initiated the information and consultation process with
the employee representatives, both at European and local levels, according to
the current regulations.
"After having successfully completed the integration of SIS, the carve-out of
Atos payment and merchant transactional activities appears as a logical and
exciting step forward for Atos. This will provide the new entity with a more
strategic flexibility and attractive "currency" to move forward, leveraging on
its leadership position in Europe." commented Thierry Breton.
FY 2012 operational performance
Revenue was EUR 8,844 million, a growth of +0.8 percent which materialized in
Managed Services (+2.4 percent) and in HTTS & Specialized Businesses (+2.7
percent). Cyclical activities declined, particularly during the second half of
the year with Systems Integration (-2.3 percent) and Consulting & Technology
Services (-5.0 percent).
The revenue performance was driven mostly by North America (+8.9 percent) and
the United-Kingdom (+7.5 percent), by a continued growth increase of Atos
Worldline (+2.2) leading to +4.8 percent in the fourth quarter and to a lesser
extent by Germany (+0.6 percent). Benelux, France and Iberia continued to be
impacted by a difficult economic situation, more particularly in the cyclical
Operating margin significantly increased compared to 2011 at EUR 580.0 million,
from 4.8 to 6.6 percent of revenue. The improvement came mainly from Germany,
North America, Central & Eastern Europe, and North & South West Europe, where
the performance was notably due to the delivery of the TOP² Program and the
restructuring plan on the former SIS scope.
(Detailed analysis on operational performance by Service Line is provided in
The Group order entries in 2012 totaled EUR 10.0 billion, representing a book to
bill ratio of 113 percent, 118 percent excluding the Siemens account.
Book to bill was 115 percent for recurring businesses (Managed Services and HTTS
& Specialized Businesses) and 109 percent in the cyclical activities (Systems
Integration and Consulting & Technology Services).
After the significant signatures in the first nine months, the Group won a large
contract in Application Management (Systems Integration) with a large European
telecom infrastructures company.
Book to bill by market was strong in all verticals, reaching 124 percent in
Public sector, Healthcare & Transport, 110 percent in Financial Services, 135
percent in Telco & Media, 122 percent in Energy & Utilities, and 95 percent in
Manufacturing, Retail & Services (104 percent excluding the Siemens account).
Thanks to the high level of order entry in 2012, the full backlog was EUR 15.6
billion at the end of 2012, representing 1.8 year of revenue, compared to EUR
14.1 billion reported one year before.
The full qualified pipeline on December 31(st), 2012 was EUR 5.4 billion,
compared to EUR 5.3 billion reported on December 31(st), 2011. It represents
7.3 months of revenue, well balanced between recurring businesses such as
Managed Services and HTTS & SB at 7 months, and cyclical activities such as
Systems Integration at 9 months of revenue.
The implementation in 2012 of the eXpand Program to accelerate revenue growth
enabled an improvement of the win rate ratio to 45 percent. More than 1,500 pre-
sales staff are now experts trained in the new offerings of the Group, which
contributed to the increase of new logos in contracts signed and in the
Operating income and net income
Operating income in 2012 was EUR 381 million as a result of the following items:
Expenses for staff reorganization were EUR 62 million and costs for
rationalization were EUR 28 million, mainly on premises.
Integration costs resulting from the acquisition of SIS and representing
primarily the migration of internal IT platforms totaled EUR 53 million as
anticipated in July 2012.
In 2012, EUR 43 million was recorded as amortization of the SIS intangible
assets, represented mainly by the SIS backlog and customer relationships
(together 'the Customer Relationships') recognized as part of the Purchase Price
Financial result was a charge of EUR 52 million and was composed of a net cost
of financial debt of EUR 34 million (of which EUR 24 million for convertible
bonds) and non-operational financial costs of EUR 18 million.
Total tax charge, including current and deferred taxes, was EUR 103 million,
representing an effective tax rate of 31.2 percent.
Therefore, net income Group share reached EUR 224 million, an increase of
+23 percent compared to 2011 statutory. Adjusted Earning per share was EUR 3.83
compared to EUR 3.20 in 2011 statutory.
Net cash and free cash flow
Group net cash position as of 31 December 2012 was EUR 232 million, compared to
a net debt of EUR -142 million at 31 December 2011.
OMDA was EUR 793 million representing 9 percent of revenue, compared to EUR 632
million in 2011.
OMDA included EUR 115 million representing losses anticipated on former SIS
projects which were funded by Siemens as part of the acquisition price but
impacted the OMDA of the period. The Group reached settlements with customers on
former SIS loss-making contracts which should reduce the estimated amount to
circa EUR 70 million in 2013.
Reorganization and rationalization cash out was EUR 126 million (vs. EUR 119
million in 2011 statutory accounts), of which EUR 54 million for rationalization
of premises as part of the real estate reduction plan.
Cash out for IT integration costs in 2012 amounted to EUR 53 million.
In 2012, capital expenditure totaled to EUR 325 million, representing
3.7 percent of revenue as in 2011, of which 55 percent was in the second half.
Working capital improved by EUR 82 million, benefiting from the TOP²
transformation Program actions on the former SIS scope with a strong focus to
quickly collect receivables.
Finally, tax paid was EUR 74 million and financial costs paid were EUR 34
The free cash flow was EUR 259 million.
Acquisitions and disposals of the year
In 2012, the Group has proceeded the transfer of deferred assets from SIS and
the acquisition of several companies positioned in niche markets:
* The Russian operations transferred from Siemens
* E-Utile, an Italian leader in smart energy solutions, 51 percent transferred
from Siemens and acquisition of the remaining 49 percent
* blueKiwi, a social workplace software company located in France
* MSL, a specialist in major events located in Spain
* Quality Equipment, a Dutch player in electronic payments
* Daesa, a small IT captive from Banco Popular in Spain
Atos sold its 49 percent stake in the Belgian joint venture SiNSYS in June and
its small operations in Greece in December.
The total number of Group employees was 76,417 at the end of December 2012.
The number of direct employees at the end of December 2012 was 69,941,
representing 91.5 percent of the total headcount, compared to 89.5 percent at
the end of 2011, reflecting the restructuring program on indirect staff.
In 2012, 12,384 new employees were recruited while attrition slightly declined
to below 11 percent.
Staff in the emerging countries represented more than 25 percent of total staff.
The Group offshore capability represented 9,158 people at the end of 2012
compared to 7,819 at the end of 2011, with a majority located in India.
The Group continued actions to reduce the number of external subcontractors,
which were 7,170 at the end of 2012 compared to 8,500 one year before. The
objective remains to carefully monitor the level of non-critical subcontractors.
During its meeting held on 20 February 2013, the Board of Directors decided to
propose at the next Annual General Meeting of Shareholders, a dividend in 2013
on the 2012 results of 0.60 Euro per share.
The Group expects to continue to slightly grow compared to 2012.
The Group has the objective to improve its operating margin rate to around
7.5 percent of revenue compared to 6.6 percent in 2012.
Free cash flow
The Group has the ambition to achieve a free cash flow above EUR 350 million.
Earnings per share (EPS)
The Group confirms its ambitions for an EPS (adjusted, non-diluted) representing
an increase of +50 percent compared to 2011 statutory (up +25 percent compared
Revenue and operating margin at constant scope and exchange rates reconciliation
Most of the scope impact related to the SIS acquisition on July 1(st), 2011 and
the exchange rate effect came mainly from the British pound and US dollar versus
Performance by Service Line
Representing 47 percent of the Group, Managed Services revenue was
EUR 4,135 million, up +2.4 percent compared to 2011. A positive dynamic lifted
revenue in North America (+7.7 percent) and in the United-Kingdom (+5.7 percent)
with the start of new large contracts won in the first half of the year. Benelux
and Iberia showed good resilience, respectively at -1.8 and -1.9 percent. The
other main Business Units achieved a growth around +2 percent.
Operating margin was EUR 324.8 million, representing 7.9 percent of revenue, an
increase of more than +200 basis points compared to 2011. The Service Line
continued to industrialize its activity through Global Factories and executed
the TOP² Program as planned. Main operating margin increases came from Germany,
North America, Central & Eastern Europe and North & South West Europe.
In Systems Integration, revenue declined by -2.3 percent compared to 2011 at
EUR 2,136 million. The Service Line represented 24 percent of the total Group
revenue. The United-Kingdom and North America recorded strong performance with
double digit growth. Most of the other main Group Business Units reported a
revenue decline, more particularly in Telecom and in Energy & Utilities.
Operating margin was EUR 104.1 million, representing 4.9 percent of revenue, an
improvement of +220 basis points compared to 2011, driven by the completion of
the integration and transformation program in Germany and in the United-Kingdom.
The streamlining of the organization combined with tight cost control, continued
to bring margin improvement in Spain and Benelux. France continued its recovery
plan, which has been reinforced by the new Systems Integration management
appointed in France in September 2012. Global Delivery through offshoring
programs in India increased the level of profitability together with the TOP²
and Lean programs. The operating margin included development costs in the New
Business Ventures: Canopy, blueKiwi and Yunano.
In Systems Integration, utilization rate was stable compared to 2011 at 78
Hi-Tech Transactional Services (HTTS) & Specialized Businesses:
Hi-Tech Transactional Services & Specialized Businesses (HTTS & SB) revenue
represented 22 percent of the Group at EUR 1,969 million, up +2.7 percent year-
on-year. HTTS business grew by +4.1 percent to EUR 1,216 million, mainly driven
by e-CS transaction activities, at +9.3 percent. Payments increased by +1.7
percent with increased volumes in Belgium in the Acquiring business and higher
terminal sales in Belgium and Germany. Specialized Businesses slightly grew by
+0.6 percent to EUR 753 million, BPO activities (Financial and Medical)
compensated for less business in Smart Energy and Civil & National Security.
Operating margin reached EUR 232.7 million, representing 11.8 percent compared
to 11.4 percent last year. The margin improvement came from HTTS which reported
15.7 percent operating margin (+90 basis points) thanks to the recovery in the
UK in the governmental project. Financial BPO remained a low margin contributor
and in Medical BPO, higher volumes were more than offset by bid costs in light
of the tender won on the new DWP PIP contract and transition costs which came in
the second half of the year. In the other Specialized Businesses, a solid
performance in Switzerland coming from growing revenue in the Civil & National
Security business partially compensated for three difficult projects which hit
the profitability of Atos Worldgrid during the first semester of 2012 and which
were resolved or settled by end of June 2012.
Consulting & Technology Services:
Consulting & Technology Services represented 7 percent of the Group with revenue
at EUR 604 million, down -5.0 percent compared to 2011.
In Consulting, France and the United-Kingdom posted strong organic growth which
was achieved by onboarding significant new contracts. Weak market conditions
continued in the Netherlands, for Manufacturing and Financial sectors, and in
Iberia for Public and Financial sectors.
In Technology Services, France grew thanks to a sustained activity in the Public
sector, while the other geographies declined, caused by weak markets in the
Netherlands (mostly in Manufacturing and Financial sectors) and Spain (mostly in
Public and Financial sectors).
Operating margin declined to EUR 24.0 million, representing 4.0 percent of
revenue. After the first semester of 2012 where the operating margin retreated,
the Service Line slightly improved its performance year-on-year during the
second half thanks to enhanced workforce management and costs base optimization.
Main contributors to operating margin were the UK in Consulting, and France and
Benelux in Technology Services.
In Consulting, utilization rate improved to 72 percent compared to 70 percent in
2011 and slightly declined to 83 percent for Technology Services compared to 84
percent in 2011.
Performance by Business Unit
FY 2012 performance by Market
Today, February 21(st), 2013, Chairman and CEO Thierry Breton, along with Senior
Executive Vice President in charge of Global Functions Gilles Grapinet, Senior
Executive Vice President in charge of Global Operations Charles Dehelly, and
Chief Financial Officer Michel-Alain Proch will comment on Atos' 2012 annual
results and answer questions from the financial community during a conference
call in English starting at 8:00 am (CET - Paris).
The audio conference numbers are:
France dial-in: +33 1 70 99 32 08 code 928096
UK dial-in: +44 207 162 00 77 code 928096
US dial-in: +1 334 323 6201 code 928096
The conference (audio and webcast) and the presentation will also be available
on our website at: atos.net, in the Investors section.
A conference call in French for media is organized today, February
21(st), 2013, at 10:00 am (CET, Paris) with Thierry Breton, Chairman and CEO.
Access details (audio and webcast) and the presentation will be available on our
website at: atos.net, in the Press section, on February 21(st), 2013, from
09:45 am (CET, Paris).
25 April 2013 First quarter 2013 Revenue
25 July 2013 First half 2013 Results
24 October 2013 Third quarter 2013 Revenue
Atos is an international information technology services company with annual
2012 revenue of EUR 8.8 billion and 76,400 employees in 47 countries. Serving a
global client base, it delivers hi-tech transactional services, consulting and
technology services, systems integration and managed services. With its deep
technology expertise and industry knowledge, it works with clients across the
following market sectors: Manufacturing, Retail, Services; Public sector,
Healthcare & Transport; Financial Services; Telecoms, Media & Technology; Energy
Atos is focused on business technology that powers progress and helps
organizations to create their firm of the future. It is the Worldwide
Information Technology Partner for the Olympic and Paralympic Games and is
quoted on the Paris Eurolist Market. Atos operates under the brands Atos, Atos
Consulting & Technology Services, Atos Worldline and Atos Worldgrid. For more
information, visit: atos.net
Press: Caroline Crouch Tel
+44 77 333 100 86
Investor Relations: Gilles Arditti Tel +33 (0) 1 73 26 00 66
This document contains further forward-looking statements that involve risks and
uncertainties concerning the Group's expected growth and profitability in the
future. Actual events or results may differ from those described in this
document due to a number of risks and uncertainties that are described within
the 2011 Reference Document filed with the Autorité des Marches Financiers (AMF)
on April 5(th), 2012 under the registration number: D12-0288.
Business Units include Germany, France, United Kingdom & Ireland, Benelux (The
Netherlands, Belgium and Luxembourg), Atos Worldline (French, German, Belgian,
Asian and Indian subsidiaries), Central & Eastern Europe (CEE: Austria,
Bulgaria, Croatia, Serbia, Poland, Czech Republic, Russia, Romania, Slovakia and
Turkey), North America (USA and Canada), North & South West Europe (N&SW Europe:
Switzerland, Italy, Denmark, Finland, and Sweden), Iberia (Spain and Portugal),
and Other Business Units including Major Events (including MSL), Latin America
(Brazil, Argentina, Mexico, Colombia and Chile), Asia Pacific (Japan, China,
Hong Kong, Singapore, Malaysia, Indonesia, Philippines, Taiwan, Thailand and
Australia), IMEA (India, Middle East, Morocco and South Africa), blueKiwi and
Atos Worldgrid (including E-Utile).
Revenue organic growth is presented at constant scope and exchange rates. 2013
objectives have to be considered with exchange rates as of 31 December 2012.
Adjusted (non diluted) Earnings Per Share (EPS) represents the net income
adjusted of restructuring, rationalization and customer relationship
amortization, net of tax, divided by the weighted average number of shares
during the year.
The AtoS proforma financial information for the 18 months to 30 June 2011
comprises the results of the former Atos Origin perimeter and the acquired scope
of the ex Siemens IT Services (SIS), as if AtoS had been in existence since
1 January 2010. The information is provided as guidance only and is unaudited.
The key assumptions used in the preparation of the information are as follows:
· The proforma information has been prepared using accounting policies
consistent with those used in the historic Atos Origin interim and year-end
· Proforma tax is based on the estimated effective rate of tax for AtoS
for the relevant periods applied to proforma profit before taxation.
· The proforma Profit and Loss account excludes significant exceptional
items as being non-recurring, notably provisions on contract risks recorded in
the first semester 2011.
The Board of Directors of Atos S.E., chaired by Thierry Breton, convened in
Bezons on February 20(th), 2013 to review and authorize for issue the accounts
of Atos Group for the year ended December 31(st), 2012. Audit procedures on the
consolidated financial statements have been performed. The relevant audit report
certifying them will be issued after completion of the specific verifications
required by French law.
Atos 2012 annual results:
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Source: ATOS via Thomson Reuters ONE
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