“Atos Origin 1st Half Year Results for 2002: Operating Margin increases from 8.5% to 9.1%”

PARIS/AMSTERDAM - September 11th, 2002

Atos Origin, a leading international information technology services provider, today announced interim results for the six months ended June 30th, 2002. Reported revenues fell 2% to EUR 1,487 million, but were nearly 2% higher on a constant scope and exchange rate basis. Operating income rose 4.8%, to EUR 135 million, giving an operating margin of 9.1%, compared with 8.5% in the same period last year. Earnings per share before goodwill amortization and non-recurring items rose 7.5% to EUR 1.90 for the half-year.

In Euro millions
HY 2002
HY 2001
Revenue (constant scope basis) 1,486.71,459.8+1.8%
Income from Operations135.1128.9+4.8%
Operating margin % 9.1%8.5%
Net Income61.267.3-9.1%
*EPS before Goodwill (Euros)1.901.76+7.5%
*EPS after Goodwill (Euros) 1.401.54 -9.2%

*EPS is stated before/after Goodwill Amortization and non-recurring items

Statement by Bernard Bourigeaud, Chairman of the Management Board
and Chief Executive Officer

Half-Year Results
Our results for the first half of 2002 demonstrate clearly the adverse impact of market conditions. Revenues in the Consulting and Systems Integration business were 14.5% lower in the first half, compared with H1 2001. However, our Managed Services business, which is based on long-term contracts with recurring revenue streams, grew by more than 22%, heavily underpinned by the new KPN contracts. Consequently, reported revenues were only 2% down. On a constant scope and exchange rate basis, total group revenues were nearly 2% higher compared with the same period in 2001.

The group's operating margin for the first half increased from 8.5% to 9.1%, which demonstrates the continuing importance of cost control. The original Atos-Origin merger re-structuring program was completed early in the year, but since last November we have been cutting costs further in response to market conditions, ensuring in particular that our staff resources are effectively deployed throughout the business. While the market remains in its current state, we will continue to focus on tight control of our cost base in pursuit of our principal operational goal, which is to raise operating margins.

Atos KPMG Consulting in the UK and The Netherlands
In spite of the difficult trading conditions, volatility provides opportunity and in the first half we announced the acquisition of KPMG Consulting in the UK and The Netherlands, which was completed on August 16th, 2002. We are delighted to welcome the partners and staff of KPMG Consulting to Atos Origin and I am quite certain that they will be a valuable, and valued, addition to the company. The new business will trade as Atos KPMG Consulting in both the UK and The Netherlands.

Like systems integration, the consulting market remains tough and appears unlikely to recover significantly in the near future, nevertheless I believe that we have acted at an appropriate time. The price that we paid was reasonable and we are well positioned to benefit from a market upturn, particularly in terms of cross-selling opportunities and through our ability to offer a comprehensive - Design, Build and Run - set of services to our clients.

Going forward, we intend to report Consulting as a separate service line from Systems Integration, while Managed Services and On-Line Services will be reported under the heading Managed Operations. The Managed Operations business, together with application maintenance in Systems Integration, will mean that nearly 50% of our revenues will be recurring in future, thereby providing strong visibility and stability.

The KPMG Consulting transaction takes us a considerable way towards satisfying two of our three major strategic ambitions, by increasing significantly our presence in the important UK market and establishing a substantial base of consulting operations for the first time.

Balance Sheet
Our Balance Sheet remains strong and I am pleased to announce that we have signed a new syndicated loan facility for EUR 840 million with a group of nine European banks, which consolidates existing facilities and will ensure that the company has adequate financial resources for its foreseeable business needs.

At June 30th, 2002, the group's net borrowings amounted to EUR 181 million, compared with EUR 235 million at last year-end. Now that the Atos-Origin merger re-structuring program is complete, I expect the company to generate strong free cash flow from its day-to-day activities. We have already generated sufficient cash in the past 12 months to pay for the acquisition of the KPN Datacentre contract.

The total cash cost of the acquisition of KPMG Consulting in the UK and The Netherlands was EUR 475 million, including both transaction costs and EUR 31 million debt at KPMG Consulting in The Netherlands, giving pro forma net borrowings of EUR 656 million at June 30th, 2002. Since that date, we have paid EUR 32 million for the assets and business of KPN SoftwareHouse, to which I refer later. At the same time we have recently realized just over EUR 34 million, net of tax, from the sale of our stake in SNT Group, which was acquired as partial consideration for the disposal in 2001 of our French customer contact center business.

Net borrowings therefore stand at EUR 660 million at the end of August 2002 and the new bank facility provides adequate resources to take advantage of new opportunities that may arise, including further major outsourcing deals.

New Business
We have now signed a third major outsourcing contract with KPN - SoftwareHouse - under which Atos Origin will take over nearly 600 staff at KPN who are engaged in system management and application development activities within the KPN organisation. There are close links between SoftwareHouse and the activities of KPN Datacentre, which Atos Origin took over in October last year. Work under the new contract has already commenced and revenues, which we expect to exceed EUR 60 million per annum, will be consolidated with effect from September 1st, 2002.

The emphasis on our large account program continued to produce success. On a like for like basis, revenues from the 42 key global accounts increased by over 20% in the first half of 2002 (excluding Philips), compared with the same period last year. I believe that KPMG Consulting will help to strengthen our client base and that strong relationships with clients are essential to provide better visibility and stability, especially in the difficult trading conditions that currently prevail.

The company does not expect any recovery in the Consulting and Systems Integration market this year and we therefore anticipate only a small increase in the group's existing total revenue base in 2002, compared with 2001, on a constant scope basis. Since the acquisition of KPMG Consulting UK and The Netherlands was closed in mid-August, their results will now be consolidated with effect from September 1st, 2002. Overall, we therefore expect an increase of 3-5% in revenues for the full year 2002, including KPMG Consulting.

We are making excellent progress with the on-going process of reducing our cost base and streamlining operations, but the continuing weakness and lack of visibility in the consulting and systems integration markets is likely to limit the progress in reported profitability. In spite of the fact that the third quarter includes the traditionally weak summer vacation period, we expect to maintain our current level of operating margin at 9.1% in the second half of 2002.

About Atos Origin
Atos Origin is an international information technology services provider. Its business is turning client vision into results through the application of consulting, systems integration and managed operations, including outsourcing and on-line services. In August 2002, Atos Origin acquired KPMG Consulting in the UK and The Netherlands, which now trade as Atos KPMG Consulting. The company generates annual revenues in excess of EUR 3.5 billion and employs 30,000 staff in 30 countries. The Group's client list includes major companies such as ABN-Amro, Akzo-Nobel, Alstom, BNP Paribas, British Petroleum, Euronext, Fiat, ICI, ING, KPN, Lucent, Philips, Renault, Royal Bank of Scotland, Saudi Aramco, Shell, UBS-Warburg, Unilever, Vivendi Universal, Vodafone and Wolters Kluwer.

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