Atos Origin, a leading international business and technology integrator, today announced its results for the six months ending 30 June, 2001. Revenues were 8.3% higher, year on year, while income from operations increased by 57% to EUR 129 million. Net earnings per share rose by 136% to EUR 1.54 per share.
|Income from Operations
|EPS before Goodwill Amortisation (Euro)
|EPS after Goodwill Amortisation (Euro)
After a first quarter in which the company was focussed on implementing the post-merger rationalisation plan, revenue growth in the second quarter accelerated to 10 per cent, giving total sales of EUR 1,518 million for the first six months of 2001.The impact of the extensive cost-cutting program which was initiated after the merger showed through strongly on the bottom line, with operating profits increasing in the first half by 57 per cent, to EUR 129 million, representing an operating margin of 8.5 per cent. The net result of EUR 67.3 million is almost equal to the proforma net profit of EUR 70.5 million for the whole of 2000.
Atos Origin's sales in France rose by 19%, particularly on the strength of demand for managed services, while growth in the Netherlands was solid at 13%. Elsewhere, sales declined moderately in those countries where the company has taken structural action to stem losses by cutting out unprofitable activities. Brazil, the UK and Germany are all now trading profitably and the US operations are expected to achieve profitability in the fourth quarter.
Difficult industry conditions produce high demand for Managed Services across all geographies. In such times outsourcing is a natural means by which customers can control their costs and achieve both cost visibility and certainty, allowing them to concentrate on their core activities. It is now likely that the company will achieve double digit growth in Managed Services for the year as a whole. Conversely, Consulting and Systems Integration has been less buoyant as customers postponed some new projects in the first half. The notable exception to this trend was enterprise solution implementations, particularly SAP and Oracle.
On 27 July 2001, the company announced that it has been awarded a contract to take over KPN's data centre activities in the Netherlands. The contract will be worth at least EUR 1.1 billion over the next six years, making it the largest outsourcing contract awarded to a European-based service provider in recent years. Furthermore, Atos Origin is currently in exclusive negotiations with KPN to take over its End User Service and SoftwareHouse operations, which will add a further EUR 200 million per annum of business. The company is also discussing other long-term partnerships with KPN in areas such as billing systems.
In July the company announced the disposal of its customer contact center business in France to SNT Group. With annual revenues of EUR 100 million, this low margin activity was the largest divestment made since the merger last year and brings to nearly EUR 130 million the revenues of businesses already sold. Further disposals are under review and are expected to be completed by June 2002.
Commenting on the results, Bernard Bourigeaud, Chairman and Chief Executive, said : ' These half year results bear the fruits of a successful and now largely completed merger. Increased size and extended geographic reach are providing us with many new opportunities and enable the company to compete effectively against the largest players in the IT service industry globally.
Management is increasingly focussed on accelerating revenue growth by strengthening our account management teams and customer relationships, and by concentrating on strategic markets. As a result, our 10 per cent revenue growth target for this year remains achievable, although some of our main clients are clearly suffering from the slowdown in world markets, which may impact our revenue growth in 2001.
Improvement in utilisation rates, cost reduction programs and adherence to our rationalisation plan, as well as quick cultural integration, allow us to be confident that we will meet our targeted operating margin for the current financial year. We are well on our way to being able to continue that progress in 2002. '
About Atos Origin
Atos Origin is a leading international business and technology integrator. Its business is turning client visions into results through the application of management consulting, enterprise, e-business and outsourcing solutions. The company has annual revenues of more than EUR 3 billion, operates in more than 30 countries worldwide and has 27,000 employees. Atos Origin's clients include ABN-Amro, BNP Paribas, Euronext, Fiat, ICI, Lucent, Philips, Renault, Saudi Aramco, Shell, Unilever and Vivendi Universal.
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