3rd Quarter Results, 2001: Profitability remains strong
Atos Origin, a leading European information technology services provider, today announced that unaudited revenues for the third quarter ended 30 September 2001 amounted to EUR 723 million, an increase of 6.2 per cent compared with a year ago.
Third Quarter Results for 2001
The trend in favour of Managed Services continued in the third quarter, producing an increase of nearly 13 per cent compared with the same period last year. However, growth in Systems Integration was minimal. On-line Services revenue was 11 per cent higher, in market conditions that were much less favourable than a year ago.
Growth in France remained at 19 per cent, but in the Netherlands revenue growth was lower than in the first half of the year. Elsewhere in Europe, performance was mixed. As expected, UK sales were lower due to the cessation of the CRS contract, but there has been an encouraging flow of new orders in the UK. Sales were flat in Germany and Italy. The main areas of weakness at the moment are North America and Asia Pacific and although they are relatively small in terms of total group revenues, nevertheless the sharpness of the dip was enough to affect significantly the growth rate for Quarter 3.
Total group revenues for the year to date were at EUR 2,241 million, 7.6 per cent higher than for the same period last year. At constant exchange rates, growth for the year to date would have been close to 8 per cent.
The third quarter operating margin was maintained at 8.5% by intensifying management disciplines within the business.
Outlook for 2002
At the time of announcing the merger between Atos and Origin more than one year ago, two key financial goals were established for 2002. The first was to achieve revenue growth of 15 per cent. The second was to reach an operating margin of 10 per cent.
Despite adverse market conditions, we remain on course to reach the 10 per cent margin target in 2002 and it is our primary operational goal. The market generally has slowed and growth in France will undoubtedly be lower next year. For these reasons, we currently believe that revenue growth for 2002 is likely to be in the range 7-9 per cent. However, if 2001 revenues are restated by removing the contact centre activites which have been sold to SNT, the underlying growth rate of the continuing business will be in double digits.
Bernard Bourigeaud, Chief Executive, added:
"In spite of the slowdown in revenue growth during the latter stages of 2001, our principal aim is to maintain our profit objective for the year in absolute terms. Revenue growth is now likely to be in the lower range 7-8 per cent but we expect the operating margin to be approximately 8.5%
Although we now expect revenue growth in 2002 to be at the more modest level of 7-9 per cent, we will have even better visibility following growth in the Managed Services business this year. We therefore remain confident of being able to raise profitability to 10% next year."
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, Alstom, BNP Paribas, Euronext, Fiat, ICI, Lucent, Philips, Renault, Saudi Aramco, Shell, Unilever and Vivendi Universal.
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