“Atos Origin Third Quarter Revenues for 2005”
Organic revenue growth of 9.4% in Q3 Atos Origin, a leading international information technology services provider, today announced that unaudited revenues for the three months ended 30 September 2005 amounted to EUR 1,293 million, representing +9.4% increase on a constant scope and exchange rate basis.
Net debt fell from EUR 363 million at the end of June 2005 to EUR 290 million at the end of September 2005.
Analysis of Revenue Performance
Group revenues for the seasonally low-key third quarter ended 30 September 2005 were EUR 1,293 million, compared with EUR 1,253 million for the equivalent period last year. Atos Origin has adopted International Financial Reporting Standards(IFRS) with effect from 1 January 2005. The comparative pro forma revenues of the combined Group in Q3 2004 were EUR 1,242 million and on that basis the 2005 figures were 4.1% higher. After adjusting for business disposals during the past twelve months and at constant exchange rates, the Group produced organic growth of +9.4%. This is the fifth quarter-on-quarter increase in succession.
| Euro Millions | Q3 2005 revenues | Q3 2004 revenues | % change |
| Reported in 2004 |
| 1,253 |
|
| Less: IFRS impact |
| -11 |
|
| Statutory growth | 1,293 | 1,242 | +4.1% |
| Less: Business Disposals |
| -60 |
|
| Less: Exchange Rate impact |
| 0 |
|
| Organic growth (*) | 1,293 | 1,182 | +9.4% |
(*) Organic growth at constant scope and exchange rates
The appendix to this statement provides an analysis of revenues by service line and geographic region.
The three main service lines each recorded strong growth compared with the same quarter last year. In Consulting there was a 12.2% organic revenue increase in the third quarter.
Revenues in Systems Integration were 8.6% higher organically in the third quarter, which extends the upward trend seen in the second half of 2004 and in 2005 to date. The growth in Q3 was mainly due to better volumes and at the same time the Group has increased the amount of recurring revenues in this segment from application life cycle management contracts.
Organic revenue growth in Managed Operations was 9.7%, reflecting the steady inflow of orders that has accumulated during the past year, including the extended partnership with Euronext.Liffe since July.
On a regional basis, revenues in France were 17.6% higher than last year, reflecting a strong performance in both Consulting and Systems Integration. Managed Operations benefited from the expansion of Atos Euronext Market Solutions, with the Euronext.Liffe business being mainly invoiced in France. The United Kingdom decrease of 5.4% was largely due to the expected end of a one-year and non-recurring contract, as explained in the half-year report. Reasonable organic revenue growth was achieved in The Netherlands (+4.1%) and revenues in Germany-Central Europe recorded an exceptional 100% rise due to the flow of new contracts in the past twelve months. In the rest ofEMEA, growth in Spain confirmed an encouraging trend, but revenues in the rest of EMEA were lower, mainly in the Middle East and the weak Italian market. After disposing of more than 50% of the business in the Americas in mid-2004, the region recorded a year-on-year organic revenue decrease of 12.7% in the third quarter due to lower volume in Systems Integration, mainly in South America. The Asia-Pacific region recorded solid organic growth of 6.7% in the quarter.
Net debt
Net debt at the end of September 2005 fell to EUR 290 million, a further decrease compared with closing net debt of EUR 492 million at 31 December 2004 and EUR 363 million at the end of June 2005.
Outlook
Atos Origin will continue to focus on achieving organic growth in 2005, ensuring that it executes properly on large contracts and provides its clients with highest level of service.
In July 2005, the Group increased its organic revenue growth target for 2005 from 5% to 8% following the extension of the activities of Atos Euronext Market Solutions(AEMS). The complex transfer and consolidation programme of the new venture is being executed according to plan, but will result in a slightly lower ramp-up of revenues than originally expected in the second half of 2005 and some additional integration costs, which will be expensed in the 2005 operating margin. We believe this will ensure that AEMS remains well positioned to be a leading provider of exchange solutions to capital markets globally.
The Group is progressing with the disposal of a number of sub-scale business activities that are declining both in terms of revenue and profitability and are no longer core to its future strategy. As a result, contract revenues that were originally expected to accrue this year are no longer being pursued and most of the costs of downsizing these activities will also be borne in the income statement this year.
The overall consequence of these specific changes is that the Group now expects organic growth in 2005 to be slightly below 8%, with an operating margin slightly higher than 7.5%. We remain confident of achieving the EUR 200 million net debt target by the end of December 2005.
About Atos Origin
Atos Origin is an international information technology services company. Its business is turning client vision into results through the application of consulting, systems integration and managed operations. The company’s annual revenues are more than EUR 5 billion and it employs over 46,000 people in 40 countries. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international blue-chip companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Euronext Market Solutions, Atos Worldline and Atos Consulting.
Contact for Press:
Marie-Tatiana Collombert
Tel: +33 (0) 1 55 91 26 33
marie-tatiana.collombert@atosorigin.com
Contact for Investors:
John White
Tel: +33 (0) 1 55 91 26 32
john.white@atosorigin.com
ANALYSIS OF REPORTED REVENUE
| By Service Line | 3 months ended 30 September 2005 |
| Euro Millions | 2005 | 2004 IFRS | Reported growth | Organic growth (*) |
| Consulting | 104 | 94 | +11.0% | +12.2% |
| Systems Integration | 519 | 500 | +3.8% | +8.6% |
| Managed Operations | 670 | 648 | +3.4% | +9.7% |
| Total | 1,293 | 1,242 | +4.1% | +9.4% |
(*) Organic growth = at constant scope and exchange rates
| By Geographic Region | 3 months ended 30 September 2005 |
| Euro Millions | 2005 | 2004 IFRS | Reported growth | Organic growth (*) |
| France | 376 | 320 | +17.6%. | +17.6%. |
| United Kingdom | 286 | 307 | -6.9%. | -5.4%. |
| The Netherlands | 242 | 233 | +4.1%. | +4.1%. |
| Germany + Central Europe | 139 | 69 | +99.4%. | +99.5%. |
| Rest of EMEA | 167 | 214 | -22.0%. | -1.3%. |
| Americas | 49 | 63 | -22.7%. | -12.7%. |
| Asia-Pacific | 35 | 36 | -1.5%. | +6.7%. |
| Total | 1,293 | 1,242 | +4.1%. | +9.4%. |
(*) Organic growth = at constant scope and exchange rates
| 9 months ended September 30th, 2005 |
| Euro Millions | 2005 | 2004 | % change |
| Reported in 2004 |
| 3,906 |
|
| Less: IFRS impact |
| -42 |
|
| Statutory growth | 4,019 | 3,864 | +4.0% |
| Less: Disposals |
| -148 |
|
| Less: Exchange Rate impact |
| -14 |
|
| Organic growth (*) | 4,019 | 3,702 | +8.6% |
(*) Organic growth = at constant scope and exchange rates
| By Service Line | 9 months ended 30 September 2005 |
| Euro Millions | 2005 | 2004 IFRS | Reported growth | Organic growth (*) |
| Consulting | 331 | 295 | +12.1% | +13.2% |
| Systems Integration | 1,654 | 1,567 | +5.5% | +8.5% |
| Managed Operations | 2,034 | 2,002 | +1.6% | +7.9% |
| Total | 4,019 | 3,864 | +4.0% | +8.6% |
(*) Organic growth = at constant scope and exchange rates
| By Geographic Region | 9 months ended 30 September 2005 |
| Euro Millions | 2005 | 2004 IFRS | Reported growth | Organic growth (*) |
| France | 1,107 | 1,012 | +9.4% | +9.4% |
| United Kingdom | 874 | 913 | -4.4% | -2.6% |
| The Netherlands | 750 | 708 | +5.9% | +5.9% |
| Germany + Central Europe | 412 | 210 | +96.0% | +96.0% |
| Rest of EMEA | 634 | 687 | -7.6% | -0.4% |
| Americas | 142 | 228 | -37.8% | -3.3% |
| Asia-Pacific | 100 | 105 | -4.3% | +10.2% |
| Total | 4,019 | 3,864 | +4.0% | +8.6% |
(*) Organic growth = at constant scope and exchange rates
