"First quarter 2013 revenue "
Q1 revenue performance in line with expectations and all 2013 objectives confirmed
- Revenue: EUR 2,117 million; slightly down –1.2 percent organically
- Book to bill ratio: 94 percent
- Backlog: EUR 15.2 billion
- Net cash: EUR 258 million
- Free cash flow: EUR 30 million
Carve out of Atos payment and merchant activities well underway
Atos, an international information technology services company, today announced its revenue for the first quarter of 2013. Revenue was EUR 2,117 million, representing an organic evolution of -1.2 percent compared to the first quarter of 2012. Order entry was EUR 1,987 million leading to a book to bill ratio of 94 percent. Net cash stood at EUR 258 million at the end of March 2013.
Thierry Breton, Chairman and CEO at Atos said: “Our revenue in the first quarter of 2013 was in line with our expectations. We continue to apply a rigorous discipline to achieve our full year targets, increasing operating margin and free cash flow as guided. I am glad with the progress of the carve-out of Atos payment and merchant transactional activities which I anticipate to be completed by mid-year. Our innovative solutions position the new entity in the fast growing area of remote payment in addition to our core acquiring and processing businesses.”
Q1 2013 revenue performance
Revenue was EUR 2,117 million, representing an organic evolution of -1.2 percent compared to the first quarter of 2012. The four largest Business Units are the UK & Ireland and Germany with 19 percent of total revenue each, and Benelux and France with 11 percent each.
Q1 2013 revenue performance by Service Line
Organic growth materialized in HTTS & Specialized Businesses at +3.1 percent, of which HTTS at +4.7 percent, and in Managed Services at +0.7 percent. Cyclical activities declined during the first quarter of the year by -6.9 percent with Systems Integration at -6.1 percent and Consulting & Technology Services at -9.3 percent.
| In EUR Million | Q1 2013 | Q1 2012* | % growth |
|---|---|---|---|
| Managed Services |
990 |
983 |
+0.7% |
| Systems Integration |
485 |
517 |
-6.1% |
| HTTS & Specialized Businesses |
481 |
467 |
+3.1% |
| Consulting & Technology Services |
161 |
177 |
-9.3% |
| Total Group | 2,117 | 2,144 | -1.2% |
(*) Constant scope and exchange rates
Representing 47 percent of the Group, Managed Services revenue was EUR 990 million, up +0.7 percent compared to the first quarter of 2012. Revenue growth was driven by the first effects of the large wins of 2012. As a result, the Telecom Media & Technology market was up by +12.6 percent with the contribution of the McGraw-Hill contract. Public sector, Healthcare & Transport increased by +7.2 percent, lifted by the ramp-up of PostNord in the Nordics and the Nuclear Decommissioning Authority in the UK. On the opposite, and as a reminder, the Service Line was affected by the strong comparative basis in Manufacturing Retail & Services due to the transition & transformation projects with Siemens.
In Systems Integration, revenue reached EUR 485 million down -6.1 percent compared to the first quarter of 2012 of which around -2.5 percent were related to less working days year-on-year. The situation was difficult in in the Public sector and in Manufacturing, Retail & Services, both markets were particularly affected in France and in North & South West Europe. A positive note came from the Telecom, Media & Technology market, which grew by +13.2 percent thanks to the transition phase on the recently signed Application Management contract in Germany with a major European telecom infrastructure company and a new project with a large client in the Media space in the UK.
Hi-Tech Transactional Services & Specialized Businesses (HTTS & SB) revenue represented 23 percent of the Group at EUR 481 million, up +3.1 percent year-on-year.
HTTS business grew by +4.7 percent to EUR 304 million, supported in particular by a strong growth in eCS at +9.4 percent benefitting from CRM & Loyalty programs in France and e-ticketing activities in the UK.
BPO activities (Financial and Medical) grew by +2.3 percent at EUR 94 million. The other Specialized Businesses remained almost flat at EUR 83 million. A slight growth was reported in Smart Energy.
Consulting & Technology Services represented 8 percent of the Group with revenue at EUR 161 million, down -9.3 percent compared to the first quarter of 2012. The period was hampered by a lower number of working days which impacted revenue by approximately -3 percent in comparison to last year.
Q1 2013 revenue performance by Business Unit
By Geography, the revenue performance was driven mostly by the ramp-up of large contracts won in 2012, particularly in North America (+15.0 percent) and in the United-Kingdom (+7.3 percent), and by a continued increase of Atos Worldline (+2.3 percent). Germany was still impacted by the base effect related to the Siemens transition contract completed at the end of the first semester of 2012 and Benelux limited its decline at -3.1 percent. Iberia was down by -10.3 percent, suffering from the continuously difficult economic situation. In France, the first quarter of the year was particularly tough, impacted by a decrease in volumes and less working days.
| In EUR Million | Q1 2013 | Q1 2012* | % growth |
|---|---|---|---|
| United-Kingdom & Ireland |
411 |
383 |
+7.3% |
| Germany |
396 |
418 |
-5.3% |
| Benelux |
240 |
248 |
-3.1% |
| France |
228 |
255 |
-10.6% |
| Atos Worldline |
228 |
223 |
+2.3% |
| North America |
153 |
133 |
+15.0% |
| Central and Eastern Europe |
127 |
130 |
-2.3% |
| North & South West Europe |
94 |
97 |
-3.2% |
| Iberia |
76 |
85 |
-10.3% |
| Other BUs |
166 |
174 |
-4.4% |
| Total Group | 2,117 | 2,144 | -1.2% |
(*) Constant scope and exchange rates
Commercial activity
The Group order entries in the first quarter of 2013 totaled EUR 1,987 million, representing a book to bill ratio of 94 percent.
Book to bill was 113 percent in Consulting & Technology Services and 114 percent in Systems Integration. Managed Services reported 87 percent and HTTS 94 percent.
The full backlog remained strong at EUR 15.2 billion and 1.7 year of revenue, equivalent to the level reached at the end of 2012 at constant exchange rates.
On March 31st, 2013 the full qualified pipeline remained healthy at EUR 5.1 billion, in the same magnitude of the one at the end of 2012, at constant exchange rates.
Net cash and free cash flow
Group net cash position at 31 March 2013 reached EUR 258 million, compared to EUR 232 million at 31 December 2012.
Excluding exchange rates translation differences, free cash flow amounted to EUR 30 million compared to EUR 33 million in the first quarter last year.
In line with its strategy to implement Cloud services platforms and the ramp-up of the new large outsourcing contracts, capital expenditures increased at EUR 84 million compared to EUR 70 million in the first quarter of 2012.
Human Resources
The total number of Group employees was 76,261 at the end of March 2013.
The number of direct employees at the end of March 2013 was 70,025, representing 91.8 percent of the total headcount, compared to 91.5 percent at the end of 2012.
In the first quarter of 2013, 2,758 new employees were recruited of which 56 percent in the emerging countries which represent more than 25 percent of total staff. The Group offshore capability represented 9,351 people at the end of March 2013 with a majority of them located in India.
The Group continued actions to reduce the number of external subcontractors, which were 6,866 at the end of March 2013 compared to 8,077 one year before.
The carve-out of payment and merchant transactional activities is well underway
All the workstreams in this project are progressing fast. Organization and governance have been defined for most of the geographies. For business operations, the scope was completed and legal and tax frameworks have also been finalized, pending the European Works Council consultation (EWC). Finally, the branding study relating to the entity name is in progress.
2013 Objectives
The Group confirms all its objectives for 2013 as stated in the February 21st, 2013 release, i.e.:
Revenue
The Group expects to continue to slightly grow compared to 2012.
Operating margin
The Group has the objective to improve its operating margin rate to around 7.5 percent of revenue compared to 6.6 percent in 2012.
Free cash flow
The Group has the ambition to achieve a free cash flow above EUR 350 million.
Earnings per share (EPS)
The Group confirms its ambitions for an EPS (adjusted, non-diluted) representing an increase of +50 percent compared to 2011 statutory (up +25 percent compared to 2012).
Appendix
Revenue at constant scope and exchange rates reconciliation
| In EUR Million | Q1 2013 | Q1 2012 | % growth |
|---|---|---|---|
| Statutory revenue | 2,117 | 2,163
|
-2.1%
|
| Scope impact | -1 | ||
| Exchange rates impact | -18 | ||
| Revenue at constant scope and exchange rates | 2,117 | 2,144 | -1.2% |
Most of the scope impact is related to the disposals of 49 percent stake in the Belgian joint venture SiNSYS in June 2012 and the Group’s small operations in Greece in December 2012, and the acquisition of several companies positioned in niche markets:
- MSL, a specialist in major events located in Spain
- Quality Equipment, a Dutch player in electronic payments
- Daesa, a small IT captive from Banco Popular in Spain
Exchange rate effects mainly came from the British pound, US dollar, Brazilian real and Argentinian peso versus the Euro.
Q1 2013 performance by Market
| In EUR Million | Q1 2013 | Q1 2012* | % growth |
|---|---|---|---|
| Manufacturing, Retail & Services | 676 | 717 | -5.7% |
| Public sector, Healthcare & Transport | 557 | 565 | -1.4% |
| Financial Services | 398 | 413 | -3.5% |
| Telecoms, Media & Technology | 331 | 298 | +11.1% |
| Energy & Utilities | 155 | 151 | +2.6% |
| Total Group | 2,117 | 2,144 | -1.2% |
(*) Constant scope and exchange rates
Conference call
Today, Thursday April 25th, 2013, Senior Executive Vice President Gilles Grapinet, and Chief Financial Officer Michel-Alain Proch will comment on Atos’ first quarter 2013 results and answer questions from the financial community during a conference call in English starting at 8:00 am (CET – Paris).
The audio conference numbers are:
| France dial-in : | +33 1 70 99 32 08 | code 931074 |
| UK dial-in : | +44 207 162 00 77 | |
| US dial-in : | +1 334 323 6201 |
The conference (audio and webcast) and the presentation will also be available on our website.
Forthcoming events
| 29 May 2013 | Annual General Meeting |
| 3 June 2013 | Dividend record date |
| 4 June 2013 | Ex-dividend date |
| 26 June 2013 | Dividend payment |
| 25 July 2013 | First half 2013 Results |
| 25 October 2013 | Third quarter 2013 Revenue |
Combined General Meeting of May 29th, 2013
The shareholders of the Company are informed that a Combined General Meeting will be held on Wednesday May 29th, 2013 at 10:00 am (CET – Paris), at the registered offices of the Company. The notice of meeting (avis de reunion), disclosing the agenda and the draft resolutions, was published on April 24th, 2013 in the Official Legal Gazette (Bulletin des Annonces Légales Obligatoires) and is available on the Company’s website. The preparatory documents and information regarding this Meeting will be made available to the shareholders, within the statutory deadlines, at the Company’s registered offices or on the Company’s website atos.net under the section “Investors”.
The Board of directors proposes to Atos SE’s General Meeting to pay a dividend equal to EUR 0.60 per share, payable on option, in cash or in shares (subject to the General Meeting of May 29th, 2013’s approval). The trading date ex-dividend shall be June 4th, 2013. The option period during which the shareholders shall have the possibility to opt for the payment of the dividend in cash or in shares shall start on June 4th, 2013 and end on June 17th, 2013. The 2012 dividends shall be paid in shares or in cash, as applicable, starting from June 26th, 2013.
Contact
Investor Relations:
Gilles Arditti
Tel +33 (0) 1 73 26 00 66
gilles.arditti@atos.net
Press:
Josephina de Vries
Tel +31 (0) 6 30 27 26 11
jose.devries@atos.net
Benedicte Brissart-Rullier
Tel +33 (0) 1 73 26 13 97
benedicte.brissart-rullier@atos.net
About Atos
Atos SE (Societas Europaea) is an international information technology services company with annual 2012 revenue of EUR 8.8 billion and 76,400 employees in 47 countries. Serving a global client base, it delivers hi-tech transactional services, consulting and technology services, systems integration and managed services. With its deep technology expertise and industry knowledge, it works with clients across the following market sectors: Manufacturing, Retail, Services; Public sector, Healthcare & Transport; Financial Services; Telecoms, Media & Technology; Energy & Utilities.
Atos is focused on business technology that powers progress and helps organizations to create their firm of the future. It is the Worldwide Information Technology Partner for the Olympic and Paralympic Games and is quoted on the Paris Eurolist Market. Atos operates under the brands Atos, Atos Consulting & Technology Services, Atos Worldline and Atos Worldgrid.
Disclaimers
This 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 2012 Reference Document filed with the Autorité des Marches Financiers (AMF) on April 3rd, 2013 under the registration number: D13-0271.
Business Units include Germany, France, United Kingdom & Ireland, Benelux (The Netherlands, Belgium and Luxembourg), Atos Worldline (French, German, Belgian, Asian, and Indian subsidiaries), Central & Eastern Europe (CEE: Austria, Bulgaria, Croatia, Serbia, Poland, Czech Republic, Russia, Romania, Slovakia and Turkey), North America (USA and Canada), North & South West Europe (N&SW Europe: Switzerland, Italy, Denmark, Finland, and Sweden), Iberia (Spain and Portugal), and Other Business Units including Major Events (including MSL), Latin America (Brazil, Argentina, Mexico, Colombia and Chile), Asia Pacific (Japan, China, Hong Kong, Singapore, Malaysia, Indonesia, Philippines, Taiwan, Thailand and Australia), India, Middle East, Morocco, South Africa, New Business Ventures (blueKiwi, Yunano and Canopy) and Atos Worldgrid (French, German, Spanish, and Italian subsidiaries).
Revenue organic growth is presented at constant scope and exchange rates. 2013 objectives have to be considered with exchange rates as of 31 December 2012.
Adjusted (non diluted) Earnings Per Share (EPS) represents the net income adjusted of restructuring, rationalization and customer relationship amortization, net of tax, divided by the weighted average number of shares during the year.
