“Atos Origin 1st Quarter Results 2002: A solid performance in tough conditions”
Operating Margin increases to 9%
Atos Origin, a leading European information technology services provider, today announced results for the first three months of 2002. Revenues amounted to EUR 749 million, an increase of 2.5% compared with the first quarter of 2001 after adjusting for divestments last year, including the disposal of the Company's contact centre business in November 2001. The group's operating margin for the first quarter increased from 8.2% to 9.0%.
The Company is pleased to announce the completion of a second major contract with KPN - End User Services - which involves managing approximately 25,000 workstations across the KPN organisation for a minimum period of six years. Total revenues will be not less than EUR 300 million during the contract period.
The systems integration market continued to show weakness in the first quarter, with revenues declining by 12% compared with Q1 2001. At the present time we see only modest indications of a rebound in the second half of this year and are increasingly of the view that significant recovery is unlikely to occur before 2003. However, Managed Services reported strong growth of nearly 23%, supported by recent order signings, including KPN. Revenues in On-Line Services were 6% higher in the first quarter, again after adjusting for the disposal of the contact centre business last year.
A significant part of the group's revenues are now generated by the group's Managed Services and On-Line Services activities, with 59% of total revenues being recurrent, based on multiple-year contracts.
Compared with the first quarter of 2001, the group's operating margin increased from 8.2% to 9.0%, which was in line with the last quarter of 2001.
If the systems integration market does not recover in the second half of 2002, the group is likely to report an overall revenue increase in the range 3-5% for the year as a whole, on a constant scope basis. We expect operating margins to increase further, but the weakness of the systems integration market may limit the full year operating margin to around 9.5%.
Bernard Bourigeaud, Chairman of the Management Board and Chief Executive commented:
"The results of the first quarter and the outlook for the second quarter are in line with the indications we gave to the market in March 2002. Our continued focus on key accounts has resulted in a growth of over 20% compared with the first quarter of 2001 excluding Philips, and 6% including Philips. Due to the slowdown in Consulting and Systems Integration we remain cautious about top line growth for the year as a whole and the focus of the business will continue to be on tight management of our cost base, with the objective of raising operating margins still further"
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, KPN, Lucent, Philips, Renault, Saudi Aramco, Shell, Unilever, Vivendi Universal and Wolters Kluwer.
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