"Third quarter 2010 revenue: EUR 1,210 million"
- Book to Bill: 90%, same compared to third quarter 2009,
- 2010 Operating Cash Flow totals EUR 83 million in first nine months,
- Objectives for the Full Year 2010 confirmed,
- Strong order entry expected for the fourth quarter 2010,
with Book to Bill anticipated to be at least 120 per cent
Today, Atos Origin, an international IT services company, reported revenue of EUR 1,210 million for the third quarter of 2010, representing a decline of -3.5 per cent compared to the same period last year, at same scope and exchange rates.
| In EUR Million | Q3 2010 | Q3 2009 | Δ% |
|---|---|---|---|
| Reported revenue | 1,210 | 1,229 | -1.5% |
| Revenue on a like-for-like basis | 1,210 | 1,254 | -3.5% |
| In EUR Million | 9M 2010 | 9M 2009 | Δ% |
|---|---|---|---|
| Reported revenue | 3,704 | 3,818 | -3.0% |
| Revenue on a like-for-like basis | 3,704 | 3,870 | -4.3% |
In the first nine months of 2010, the revenue was EUR 3,704 million, representing an organic decline of -4.3 per cent.
Revenue by Service Line
|
Total Revenue
|
|||
|---|---|---|---|
| In EUR Million | Q3 2010 | Q3 2009 proforma | % organic growth |
| Managed Services |
452 |
486 |
-6.9% |
| Systems Integration |
412 |
427 |
-3.5% |
| Hi-Tech Transactional Services |
258 |
244 |
+5.5% |
| Consulting |
48 |
54 |
-11.2% |
| Medical BPO |
40 |
44 |
-7.5% |
| Total Group |
1,210 |
1,254 |
-3.5% |
Representing 37 per cent of the Group, Managed Services revenue was EUR 452 million in the third quarter down
-6.9 per cent compared to the third quarter of 2009, of which -4 per cent is related to the expected ramp-down of Arcandor in Germany.
Representing 34 per cent of the Group, Systems Integration revenue was EUR 412 million, down -3.5 per cent in the third quarter compared to a decline of -5.6 per cent in the first half of 2010. The improvement came mainly from France, where the activity improved +6 per cent, and from the double digit growth posted by Asia and offshore countries.
Representing 21 per cent of the Group, Hi-Tech Transactional Services (HTTS) revenue was EUR 258 million, up +5.5 per cent compared to the third quarter of 2009. Growth came from the payments activity, which posted a +7.3 per cent growth and from electronic services which increased +5.5 per cent. Decline in the Financial Markets entity was limited to -5.5 per cent.
Representing 4 per cent of the Group, Consulting revenue was EUR 48 million, down -11.2 per cent compared to a decline of -17 per cent in the first half of 2010. Consulting is back to positive growth in France and the United Kingdom. It remains challenging in the Benelux due to the combination of headcount reduction and the significant pre-sales project support that is time consuming for the consulting teams.
Representing 3 per cent of the Group, Medical BPO revenue was EUR 40 million, down -7.5 per cent, i.e. EUR 4 million, as a result of the moratorium which came to an end on 10 September for the Group.
Revenue by Global Business Unit
|
Revenue
|
|||
|---|---|---|---|
| In EUR Million | Q3 2010 | Q3 2009 proforma | % organic growth |
| France |
265 |
256 |
+3.6% |
| Benelux |
222 |
231 |
-3.8% |
| United Kingdom |
226 |
245 |
-7.8% |
| Atos Worldline |
216 |
206 |
+4.5% |
| Germany / CEMA |
110 |
139 |
-20.9% |
| Spain |
65 |
76 |
-13.6% |
| Other countries |
105 |
101 |
+4.5% |
| Total Group |
1,210 |
1,254 |
-3.5% |
In France, revenue was EUR 265 million up 3.6 per cent compared to the third quarter of 2009. The country returned to growth after stabilising in the first half. The cyclical activities, Consulting and Systems Integration, grew respectively by +5 and +6 per cent and Managed Services slightly increased in the third quarter, following a decline in the first half.
Revenue in the Benelux was EUR 222 million, down -3.8 per cent compared to a decline of -11.2 per cent in the first half of 2010. It maintained its revenue in Managed Services at the same level as that in 2009. Systems Integration declined -2.5 per cent compared to a decline of -27.5 per cent in the third quarter of 2009. The limited decline in revenue in the Benelux was the result of the stabilization of prices and the new contracts in financial services.
In the United Kingdom, revenue totalled EUR 226 million down -7.8 per cent compared to the third quarter of 2009. Cyclical activities, Consulting and Systems Integration, limited their decline to -2.7 per cent, while Managed Services revenue dropped -17.7 per cent compared to the third quarter of 2009 when growth was particularly strong. Business has nevertheless been resilient. At the beginning of September Atos Origin was the first supplier to the British Government to sign a Memorandum of Understanding, following the moratorium put in place by the new Government. As indicated in the press release issued on 10 September, Atos Origin will continue to deliver all its existing IT contracts and looks for further business opportunities with UK Government.
Atos Worldline revenue for the third quarter was EUR 216 million, up +4.5 per cent compared to the same period last year. The payments activity posted a +6.9 per cent growth thanks to higher volumes, and Electronic Services increased by +7.5 per cent, while Financial Markets continued to decline as anticipated.
In Germany / CEMA, revenue was EUR 110 million, representing a decline of -20.9 per cent compared to last year, almost two thirds of which are due to the expected ramp down of Arcandor. Excluding this effect, third quarter revenue in Germany was flat year on year.
In Iberia, revenue was EUR 65 million down -13.6 per cent. This geography, where 80 per cent of the activity is in Systems Integration and Consulting, is still affected by a tough economic environment, resulting in price pressures and less deals generally in the market place.
The GBU Other countries reported revenue of EUR 105 million, up +4.5 per cent thanks to the growth in Asia and offshore countries.
Commercial activity
Total order entries for the third quarter of 2010 were EUR 1,093 million, representing a Book to Bill ratio of 90 per cent compared to 89 per cent for the third quarter in 2009.
The Arcandor Group has completed a deal with a German private fund to acquire all of the department stores from its Karstadt subsidiary. Atos Origin remains cautious and has only booked into its backlog half of its Managed Services contract with Karstadt that ends in December 2012.
Due to negotiations with the UK Public Sector that concluded with the signature of a Memorandum of Understanding on 10 September 2010, some significant Managed Services contract renewals were postponed to the fourth quarter of this year.
The Group’s objective is to reach in the fourth quarter a book to bill of at least 120 per cent, in order to achieve a 109 per cent book to bill for the full year in 2010, compared to 100 per cent for the full year 2009.
On 30 September 2010, the full backlog was EUR 7.2 billion, representing 1.4 years of revenue as at 30 June 2010 and at 30 September 2009.
On 30 September 2010, the weighted full pipeline was EUR 2.8 billion, compared to EUR 2.6 billion at 30 June 2010 and 2.8 billion at 30 September 2009.
Net debt
Group net debt on 30 September 2010 stands at EUR 198 million after the acquisition of the company Venture Infotek in India, Shere in the UK, and the minority interest of Atos Worldline in Germany. During the third quarter 2010, the Group pursued its actions to monitor its investments and to improve the working capital. With an increase of the OMDA resulting from the improvement of the Operating Margin, the Group generated an operational cash flow of EUR 83 million during the first nine months of 2010, in line with its annual objective.
Human Resources
The number of employees at the end of September was 47,654 compared to 48,188 at the end of June 2010.
The number of direct staff is stable since April 2010 while the number of indirect staff has declined by -5 per cent during the third quarter in the context of the Added Value Analysis (AVA) program implemented by the Group.
The attrition rate was 12 per cent in the third quarter, compared to 9 per cent for the first half of 2010.
The Group continues its Human Resources policy to protect both the employment and the employability. 1,700 engineers joined the company as direct staff during the third quarter 2010. Half of these new joiners were in offshoring countries.
2010 Objectives
The Group confirms its objectives for 2010 as communicated at the beginning of the year. Priorities remain to maintain and further improve the skills of its staff, to improve operating margin and cash generation as per its three-year plan.
Operating margin
As part of its 2009-2011 plan to improve its profitability, the Group confirms its ambition to increase its operating margin by +50 to +100 basis points in 2010.
Cash Flow
The Group has the objective to confirm the improvement achieved in 2009 by generating a net operational cash flow in the same range in 2010.
Revenue
Due to the Arcandor bankruptcy, the Group expects in 2010 a slight revenue organic decrease, however at a lesser extent than the one achieved in 2009.
APPENDIX: YEAR-TO-DATE SEPTEMBER 2010 REVENUE PERFORMANCE
Revenue performance by Service Line
|
Total Revenue
|
|||
|---|---|---|---|
| In EUR Million | 9M 2010 | 9M 2010 proforma | % organic growth |
| Managed Services |
1,355 |
1,449 |
-6.5% |
| Systems Integration |
1,314 |
1,382 |
-4.9% |
| Hi-Tech Transactional Services |
757 |
732 |
+3.3% |
| Consulting |
157 |
186 |
-15.3% |
| Medical BPO |
120 |
120 |
+0.5% |
| Total Group |
3,704 |
3,869 |
-4.3% |
Revenue performance by Global Business Unit
|
Revenue
|
|||
|---|---|---|---|
| In EUR Million | 9M 2010 | 9M 2009 proforma |
% organic growth |
| France |
838 |
828 |
+1.2% |
| Benelux |
682 |
748 |
-8.9% |
| United Kingdom |
668 |
703 |
-5.0% |
| Atos Worldline |
636 |
623 |
+2.1% |
| Germany / CEMA |
351 |
428 |
-17.8% |
| Spain |
223 |
250 |
-10.7% |
| Other countries |
306 |
289 |
+5.9% |
| Total Group |
3,704 |
3,869 |
-4.3% |
A webcast in English will be held today 13 October at 9:30 am, CET time.
Forthcoming events
16 February 2011: 2010 annual results
Disclaimers
Global Business Units include France, United Kingdom, Benelux (The Netherlands, Belgium and Luxembourg), Atos Worldline (French, German, Belgium and Indian subsidiaries), GCEMA (Germany Central Europe with Austria, Poland, and Mediterranean countries and Africa which include South Africa, Greece, Turkey and Switzerland), Spain, and Other countries (South America including Argentina, Brazil and Columbia, Asia Pacific including China, Hong Kong, Singapore, Malaysia, Indonesia, Taiwan, and Japan, as well as North America, India, Major Events, Middle East with Dubai and Morocco).
Revenue organic growth is presented at constant scope and exchange rates.
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 2009 Reference Document filed with the Autorité des Marchés Financiers (AMF) on 1 April 2010 under the registration number: D10-0199. The update of the 2009 Reference Document has been filed to the AMF on 30 July 2010 under the registration D.10-0199-A01.
About Atos Origin
Atos Origin is a leading international Information Technology (IT) services company, providing Hi-Tech Transactional Services, Consulting, Systems Integration and Managed Services to deliver business outcomes globally. The company’s annual revenues are EUR 5.1 billion and it employs 49,000 people. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting.
Press contact:
Caroline Crouch,
Tel: +44 77 333 100 86,
caroline.crouch@atosorigin.com
Investor contact:
Gilles Arditti,
Tel: +33 (0) 1 73 26 00 66,
gilles.arditti@atosorigin.com
