“Atos Origin 2007 First Half Results”
Paris, 1 August 2007
Atos Origin, an international information technology services company, today announced its 2007 first half results.
Net income Group share
The Group achieved consolidated revenues of EUR 2,890 million in H1 2007, up by +7.2% compared to H1 2006 in line with expectations.
At constant scope and exchange rates, revenues organic growth was +2.7%. The services revenues growth excluding purchases for re-selling was +10.1 %, representing an organic growth of +6.0%.
Consulting saw a decrease in revenues of -6.5% mainly coming from the down-sizing of the operations engaged in Q4 2006 in the United Kingdom. However the utilization rate grew by +4 points between H2 2006 and H1 2007 in the United Kingdom.
While The Netherlands revenues were stable, Iberia and Belgium continued to develop, both achieving strong organic growth. France remained affected by volume capacity and a new CEO was hired and took over the Consulting division last May.
Revenues in Systems Integration saw organic growth of +3.9% driven by The Netherlands, Germany and Belgium with +6%, Spain at +11%, Americas, Mediterranean countries and Asia Pacific above +20%, while revenues were stable in France.
Revenue decreased in the United Kingdom and Italy as the result of restructuring initiated in 2006.
Managed Operations achieved organic growth of +3.1%, with all the large territories progressing except the United Kingdom affected for the last time by the Metropolitan Police contract. This will be compensated as of H2 2007 by the new large contracts which were ramping up in H1 2007. Atos Worldline continued to develop satisfactorily and the integration of Banksys is well underway.
In H1 2007 the operating margin reached EUR 118 million at 4.1 % of the revenues (EUR 129 million before costs of Transformation Plan) compared to EUR 133 million in H1 2006.
Excluding Transformation costs, the operating margin rate is 4.5% above 4.2% reached in H2 2006 showing effects of the actions launched. A progressive improvement was observed as the operating margin rate increased by more than one point between Q1 and Q2 2007.
Operating income and net income
The operating income reached EUR 108 million after reorganisation and rationalisation charges for EUR 29 million mainly in Italy and in the United Kingdom and a EUR 22 million gain on disposal mainly for the Actis EDI business in Germany.
The net income group share reached EUR 57 million compared with EUR 10 million last year.
The net debt was at EUR 509 million at the end of June 2007. As anticipated, the level of capital expenditure was EUR 169 million due to start up investment for more than EUR 50 million related to new contracts signed in H2 2006 in Managed Operations, to the consolidation of mainframe and data centres in line with the execution of the Transformation Plan for EUR 20 million, and to the financing policy of the Group to replace operating lease by capital investments.
The full capital expenditure level expected for the total year 2007 is maintained at 4.6% of the revenues.
The impact on cash flow from the increase of capital expenditure in H1 2007 was mitigated by a strong action of the Group to diminish change in working capital, which seasonal increase in the first half of the year was reduced by half compared to H1 2006.
3O3 Transfomation Plan:
The 3O3 Transformation Plan launched in February this year and focused on 7 initiatives is now divided into more than 70 projects involving all the countries of Atos Origin.
During H1 2007 with a very strong internal involvement, the Transformation Plan has already achieved a number of overall measurable results in each initiative including:
- the opening of Atos University Sales & Markets,
- the choice of common industrialization tools, processes and organization for all countries,
- the implementation of a new governance model in India,
- the start of an aggressive recruitment campaign for offshoring, doubling our monthly net additions in India from January 07 to June 07,
- the launch of an adaptation plan for 700 staff in System Integration France,
- the acceleration of consolidation of mainframe activities into one centre in Germany, and the closing of such centre in Italy,
- the closing of two data centres, three other centres preparing to close,
- specific global purchasing projects launched on 5 priority categories to provide quick wins.
The Group confirms the objective of revenues top line growth at +8.5%.
The Group reached an operating margin rate of 4.5% before Transformation Plan during the first half of 2007 and maintains the objective to be above the 4.6% reached in 2006.
The objectives for 2007 are confirmed despite the announcement on 25 July 2007 by the British Department of Health that the diagnostics services contract with Atos Origin is terminated.
2007 will pave the way to 2009, with a confirmation of our objective to double the operating margin in absolute value in 2009 compared to 2006.
15th November 2007
Third quarter 2007 revenues announcement
The document contains further forward-looking statements that involve risks and uncertainties concerning the Group's expected growth and profitability in the future. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2006 annual report filed with the Autorités des Marchés Financiers (AMF) on 6 April 2007 as a Document de Référence under the registration number: D07-302.
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 EUR 5.4 billion and it employs 50,000 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.
Tel. : +33 (0) 1 55 91 26 33,
Investor contact :
Tel. : +33 (0) 1 55 91 28 83,
Revenues organic growth
|EUR million||H1 2007||H1 2006||% Change|
|Reported first half revenues|
|Currency translation and other|
|Organic revenues growth|
Revenues by service line
|H1 2007||H1 2006||% Change reported||% Change organic|
|Total group revenues|
Revenues and operating margin by geographical area
|In € Million|
Operating Margin %
|H1 2007||H1 2006||% Organic|
|H1 2007||H1 2006||H1 2007||H1 2006|
|Germany + Central Europe||293||289||+3.2%||21.5||18.5||7.4%||6.4%|
|Rest of EMEA||523||375||+4.4%||30.1||13.5||5.8%||3.6%|
|Total Group before costs of Transformation Plan||2,890||2,696||+2.7%||129.3||133.0||4.5%||4.9%|
|Transformation Plan operating costs||(11.6)||-0.4%|
|Total Group after costs of Transformation Plan||2,890||2,696||+2.7%||117.7||133.0||4.1%||4.9%|
(*) Organic growth at constant scope and exchange rates