First quarter of 2020 – Atos

A resilient profile and a potent harmony sheet to experience an unprecedented situation

Revenue at € two,834 million

-.8% organic and natural progress

E-book to invoice ratio at 103%

Renewals of main contracts in North America

Acceptable business enterprise combine to assistance consumers in Covid-19 context

Required expense steps becoming implemented to guard running margin

SPRING transformation plan to an Market technique effectively on observe

Update of 2020 targets post Covid-19

 

Paris, April 22, 2020,

Atos, a world wide chief in digital transformation, now announces the revenue of its initial quarter of 2020.

Elie Girard, CEO, explained: “In this unprecedented ecosystem where uncertainty prevails, our initial priority has been to guard our workforce though providing whole continuity of assistance to our clientele. The Team is solidly positioned to navigate smoothly as a result of the disaster many thanks to deep consumer relationships throughout all industries, a resilient business enterprise combine and a sturdy harmony sheet that supplies a potent monetary overall flexibility.

Our 110,000 colleagues throughout the earth have provided an instant and exceptional reaction to customers’ challenges and need to have for assistance as a result of our “Always Ready” plan designed now since the starting of the calendar year. Now our minds and initiatives are turning to the post-Covid instances, actively planning for the “new normal” which will see an acceleration in distinct customers’ demands, namely knowledge platforms, cybersecurity, cloud migration, digital workplace and decarbonization.

We revise now our targets for 2020 demonstrating the resilience of the Team and the willingness to share any effect reasonably throughout stakeholders. I am convinced that Atos will emerge from this world wide disaster more robust than at any time and all set to transfer ahead to the following phase.”

Q1 2020 revenue was € 2,834 million, down -.8% organically. In the context of Covid-19 disaster and constraints and lockdowns in March in most of the international locations where the Team operates, revenue reduced only somewhat many thanks to the resilient profile of its corporations based mostly on multi-calendar year contracts merged with its sound business enterprise in Massive Facts and Cybersecurity. Moreover, and in spite of the disaster, the Team accelerated its commercial dynamism with purchase entry at € 2,908 million primary to a e-book to invoice ratio of 103%, appreciably up in contrast to last calendar year at 86%.

Q1 2020 revenue efficiency by Market

In € million	Q1 2020	Q1 2019*	Natural evolution
Production	539	555	-two.nine%
Monetary Providers & Insurance plan	527	542	-two.6%
General public Sector & Protection	584	566	+three.two%
Telecom, Media & Technologies	443	439	+.8%
Resources & Providers	418	416	+.four%
Health care & Lifestyle Sciences	323	340	-four.nine%
Complete Team	two,834	two,858	-.8%
* At constant scope and trade costs

 

Production achieved € 539 million of revenue, down -two.nine% at constant scope and trade costs. The Market benefitted from a fantastic efficiency in Automotive with the ramp-up of a German car or truck company and Rheinmetall on knowledge administration contracts, compensating the effect in Daimler thanks to Covid-19 and the ramp down of PSA. Conversely, Production was impacted by reduce volumes with Siemens, a slowdown in the Aerospace sector thanks to Covid-19, and many shifts of machines sales towards the finish of the quarter.

Monetary Providers & Insurance plan revenue was € 527 million in the initial quarter 2020, down by -two.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as effectively as the progress of exercise with a payment company in France which have a lot more than compensated for the reduction of volumes from banking institutions in Central Europe. Increasing markets suffered from non-repeated sales executed last calendar year in APAC and Middle East & Africa. In North America, venture based mostly functions reduce now noticed in previous quarters was accelerated in March thanks to choices from many Monetary Providers firms to postpone or lower discretionary costs in the context of Covid-19.

General public Sector & Protection revenue was € 584 million, up +three.two% at constant scope and trade costs. The progress was driven by the potent efficiency recorded in Northern Europe, many thanks to the continuation of the deal with European Middle for Medium selection Weather conditions forecast as effectively as with EU Lisa and sensible knowledge platform in Benelux. North America obtained balance regardless of reduce volumes, many thanks to additional sales on existing contracts. The situation was a lot more complicated in Southern Europe, impacted by the ramp-down of Superior Overall performance Computing exercise as effectively as non-repeated sales executed last calendar year. Central Europe was negatively impacted by reduce volumes, and ultimately Increasing Marketplaces was impacted by revenue recorded last calendar year for the Tokyo Olympic Online games preparing and not repeated this calendar year.

Telecom, Media & Technologies achieved € 443 million, up +.8% organically, with a contrasted efficiency by geography and by exercise. Superior Tech & Technologies posted a potent progress, driven by Unified Communication & Collaboration choices in Central Europe, sustained by organic and natural progress of recently obtained company Maven Wave in North America and deal ramp-up with a substantial lover, as effectively as additional sales in Southern Europe. Media increased as effectively, benefitting from new business enterprise progress, coupled wit
h larger volumes with existing consumers in North America. Telecom exercise was mostly impacted by some ramp-downs in Southern Europe.

Revenue in Resources & Providers achieved € 418 million and increased by +.four% organically. Small business in Electrical power & Utilities sector fueled the progress. In particular, the Market delivered a Superior Overall performance Computer in South America. Digital workplace expert services ramped-up with a main Electrical power supplier in North America and with National Grid in Northern Europe. The situation in Retail, Transportation & Hospitality sectors was a lot more complicated in the context of Covid-19. Indeed, though the ramp-up of a new IoT deal signed in the location of predictive routine maintenance benefitted to North America, the Market faced volume reductions in Europe.

Health care & Lifestyle Sciences revenue was € 323 million, down by -four.nine% in contrast to Q1 2019, impacted by volume reductions on very distinct contracts in both of those North America and Northern Europe, though the business benefitted from the ramp-up of a world wide deal with Bayer and a digital workplace deal signed last calendar year in Central Europe, and the ramp-up of an Australian General public Agency deal in Increasing Marketplaces. Southern Europe benefitted from a potent exercise in digital assignments and Superior Overall performance Computing.

 

Q1 2020 revenue efficiency by Regional Small business Device

 

In € million	Q1 2020	Q1 2019*	Natural evolution
North America	681	699	-two.6%
Northern Europe	698	696	+.three%
Southern Europe	594	609	-two.6%
Central Europe	667	660	+one.%
Increasing Marketplaces	194	192	+one.%
Complete Team	two,834	two,858	-.8%
* At constant scope and trade costs

The initial quarter of 2020 showed unique revenue evolution by Regional Small business Models which can be summarized as follows:

• In North America, revenue achieved € 681 million, lowering by -two.6% organically mostly coming from Covid-19 triggered venture stops and volume reductions in many Industries. The Small business Device obtained progress in Telecom, Media & Technologies and Resources & Providers many thanks to new emblem, larger volumes and ramp up of existing contracts
• In Northern Europe, revenue was around secure at € 698 million. Powerful business enterprise was recorded in General public Sector & Protection mostly led by the continuation of the HPC deal with European Centre for Medium Assortment Weather conditions Forecast, as effectively as by deliveries to European Union Institutions. Telecom, Media & Technologies and Manufacturing faced some contracts ending and Health care & Lifestyle Sciences a reduction on Small business Course of action Outsourcing contracts
• In Southern Europe, revenue achieved € 594 million, lowering by -two.6% Health care & Lifestyle Sciences posted a double-digit progress many thanks to digital assignments delivered and Superior Overall performance Computing functions. The geography was impacted by non-repeated sales also on Superior Overall performance Computing functions executed last calendar year in many Industries
• In Central Europe, the geography increased organically by +one.% primary to a € 667 million Production benefitted from many ramp-up of infrastructure contracts and additional assignments. Revenue in Telecom, Media & Technologies also increased, driven by Unified Communication & Collaboration business enterprise. Health care & Lifestyle Sciences posted a double-digit progress mostly fueled by new contracts. General public Sector & Protection was impacted by non-repeated sales and assignments obtained last calendar year though new assignments in SAP HANA and in Digital were executed in Germany and in Austria. Lastly, Resources & Providers was impacted by a reduce desire in Unify Communication channels
• Increasing Marketplaces achieved € 194 million revenue, +one.% Production posted a sound progress, pushed by a larger degree of sales as effectively as more robust desire in digital assignments mostly in Asia-Pacific and South America. Revenue in Source & Providers strongly increased fueled by Superior Overall performance Computing exercise in South America though the situation was a lot more complicated in Monetary Providers mostly in Asia Pacific.

Q1 2020 revenue efficiency by Division

 

In € million	Q1 2020	Q1 2019*	Natural evolution
Infrastructure & Facts Administration	one,558	one,566	-.5%
Small business & Platform Answers	one,016	one,069	-four.nine%
Massive Facts & Cybersecurity	259	223	+16.three%
Complete Team	two,834	two,858	-.8%
* At constant scope and trade costs

In Infrastructure & Facts Administration (IDM), revenue was € 1,558 million, -.5% organically. The Division continued to roll-out its transformation model by extending Hybrid Cloud Orchestration as effectively as rising Digital Workplace implementation.

The distinct situation thanks to Covid-19 pandemic demanded a sound business enterprise continuity for vital infrastructures for its consumers. Indeed, the Division recorded a potent desire on Digital Workplace answers (accessing apps from anywhere), company communication choices with Unified Collaboration & Communication, community connections, etcetera. These functions are linked to the remote working that has been set in area by a ton of organizations to experience the lockdown and preserve their exercise.

Lastly, in the existing context, the Division recorded fewer revenue created by machines sales and fertilization in existing contracts in Mar
ch.

In Small business & Platform Answers (B&PS) revenue was € 1,016 million, -four.nine% organically. As a reminder, the Division was down -one.two% in Q4 2019 thanks to the headwinds in Monetary Providers in North America as effectively as in Automotive business in Germany, and thus did not expect any enhancement in the starting of 2020 even prior to Covid-19.

In the new context of Covid-19, the Division had to experience a slowdown in most of the Industries. Indeed, this business enterprise section is considerably a lot more dependent from the cycle and consumers started off in March to postpone discretionary assignments. The Team considers that the most impacted functions will be Technologies Skilled Providers demanding engineers working on purchaser websites, that simply cannot be executed on a remote manner (circa 30% of Small business & Platform Answers revenue). On the reverse, Software Enhancement and Servicing, based mostly on extensive time period contracts really should be resilient (circa 40% of Small business & Platform Answers revenue). In among, a substantial element of vital Digital Jobs (circa 30% of Small business & Platform Answers revenue) can be executed on a remote manner, but the volume of the business enterprise will rely in the following months from the purchaser needs on new assignments.

The business enterprise in Massive Facts & Cybersecurity (BDS) remained potent with revenue up +16.three% organically at € 259 million in the initial quarter of 2020. In the existing context, the remote working as effectively as the raise of cyberattacks led organizations to reinforce the security of their infrastructure and knowledge. As examples, consumers requested for a lot more answers of identification in swift manner, and consulting on the solidity of their security infrastructure.

In Massive Facts, there was no discontinuity in the provide chain many thanks to pro-energetic stock administration. The desire stays potent in Superior Overall performance Computing. As an instance, remote obtain to SAP HANA requires additional processing electrical power and thus more substantial demands of Sequana S in-memory servers. Lastly, Mission Important Process business enterprise also recorded a large revenue progress.

Commercial exercise

During the initial quarter of 2020, the Team purchase entry achieved € 2,908 million symbolizing a E-book to Monthly bill ratio of 103%, in contrast to 86% obtained more than the identical interval last calendar year.

The major new contracts signed more than the interval were notably in North America with a substantial American company in Protection Sector (Telecom, Media & Technologies), in Central Europe with Norddeutsche Landesbank (Monetary Providers & Insurance plan) and a world wide european pharmaceutical company (Wellness & Lifestyle Sciences) and in Southern Europe with a main utility in France and with Ile-de-France Mobilités (Resources & Providers), as effectively as with a French banking establishment (Monetary Providers & Insurance plan).

Deal renewals of the quarter included substantial signatures with notably the initial element of the renewal of Texas Department of Information and facts Resources deal (General public Sector & Protection), the renewal of Conduent deal (Telecom, Media & Technologies) in North America, a deal with a World wide European business in funds merchandise for SAP HANA (Production) in Central Europe, as effectively as with the French UGAP (General public Sector & Protection) in Southern Europe.

In line with this dynamic commercial exercise, the whole backlog amounted to € 22.one billion at the finish of March 2020, symbolizing one.nine calendar year of revenue. The whole capable pipeline achieved € 7.6 billion, symbolizing 7.8 months of revenue.

Human resources

The complete headcount was 108,602 at the finish of March 2020, broadly secure in contrast to 108,317 at the finish of December 2019.

In the initial quarter of 2020, the Team employed 5,043 employees, mostly in offshore international locations.

How Atos handles Covid-19 effect

Considering the fact that finish of January, the Team administration, supported by Team Human Resources, has been focusing on the health and basic safety of workforce though making sure a correct implementation of pre-defined business enterprise continuity options in each individual Division.

The Team also activated the “Always Ready” plan, pulling with each other all Team answers precisely tailored to this distressed situation and becoming proactively available to consumers to support them go as a result of the disaster: assistance to generalized homeworking such as collaboration capabilities, distinct assistance to general public & health institutions, reinforcement of cybersecurity protections, etcetera. Customers’ feedback and fulfillment with regards to Atos teams reactivity has been overwhelmingly good. Atos is also included into lots of governmental assignments throughout the earth to struggle versus the virus, and put together the progressive reduction of constraints and lockdowns.

To guard its running margin, the Team has taken potent steps on its expense foundation in the adhering to locations:

• Powerful centralized monitoring of personnel costs (choosing freeze, cancellation of salary increases, effect on variable payment, vacations, etcetera.)
• Substitute of subcontractors by own freed up employees
• Cancellation of non purchaser relevant discretionary costs
• Powerful conserving plan on non personnel costs.

In complete, the Team introduced a plan symbolizing a complete total of c. 400 million euros of price savings in 2020.

Up to date 2020 targets post Covid-19

As the 2020 targets disclosed on February 19, 2020 were pre Covid-19 impact, the Team updates now its a few targets for the whole calendar year 2020, based mostly on the existing macroeconomic scenario of a progressive recovery more than H2 2020 and 2021, as effectively as the management’s every day discussions with Team consumers:

• Revenue organic and natural evolution: among -two% and -four% (as opposed to c. +two% pre Covid-19)
• Working margin fee: nine% to nine.5% of revenue (as opposed to +twenty bps to + 40 bps previously mentioned 2019 (10.three% reported) pre Covid-19)
• Free cash move: € .5 billion to € .6 billion (as opposed to c. € .7 billion pre Covid-19)[*].

The Team suspends its targets for 2021, the last calendar year of the a few-calendar year approach offered at the Trader Day held on January 30, 2019. The Team will present its vision as effectively as its mid-time period targets at the 2020 Analyst Day (day to be rescheduled).

Postponement of Once-a-year Standard Meeting and exceptional cancellation of dividend payment in 2020

Thanks to the exceptional circumstances linked to the Covid-19, the Board of Administrators, which fulfilled on March 31, 2020, has resolved to
postpone the Once-a-year Standard Meeting initially scheduled on May fourteen, 2020 to June 26, 2020.

In these unprecedented circumstances, during its session on April 21, 2020, the Board of Administrators took the exceptional conclusion not to propose the one.40 euro for each share dividend which was initially deemed to be submitted to the Once-a-year Standard Meeting. In addition, the Chief Government Officer as effectively as other associates of the Standard Administration Committee have resolved to lower by 30% their payment during the existing a few-month interval from March to May 2020. The Chairman of Atos’ Board of Administrators has created the identical conclusion.

The Team confirms that the cancellation of the dividend this calendar year is an exception to its dividend coverage with a pay out-out ratio among twenty five% and 30% of Net profits Team share.

 

Appendix

Revenue at constant scope and trade costs reconciliation

In € million	Q1 2020	Q1 2019	% transform
Statutory revenue	two,834	two,818	+.6%
Trade costs impact		26
Revenue at constant trade costs	two,834	two,843	-.three%
Scope impact		fourteen
Trade costs impact on obtained/disposed perimeters		one
Revenue at constant scope and trade costs	two,834	two,858	-.8%

Scope effects amounted to €+fourteen million for revenue and are mostly relevant to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+18 million), the acquisition of IDnomic, consolidated as of Oct one, 2019 (three months for €+four million), the acquisition of X-PERION, consolidated as of December one, 2019 (three months for €+two million), the disposal of some distinct Unified Communication & Collaboration functions mostly in Q1 2020 (complete restatement of €-four million) as effectively as former ITO functions in the Uk starting of H2 2019 (three months for €-four million), and ultimately the disposal and decommissioning of non-strategic functions within CVC.

Forex trade costs effects mostly arrived from the American greenback as effectively as the British pound and positively contributed to revenue for €+26 million.

 

Conference get in touch with

These days, Wednesday, April 22, 2020, the Team will hold a meeting get in touch with in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in purchase to remark on Atos’ Q1 2020 revenue and solution concerns from the monetary neighborhood.

You can be a part of the webcast of the meeting:

• on net, in the Investors section
• by smartphones or tablets as a result of the scan of:
• by telephone with the dial-in, 5-10 minutes prior the starting up time:
  • France             +33 one 70 70 07 81       code 12652364
  • Germany             +forty nine 69 2222 2625       code 12652364
  • Uk             +44 844 481 9752       code 12652364
  • US             +one 646 741 3167         code 12652364
  • Other international locations +44 2071 928338        code 12652364

Immediately after the meeting, a replay of the webcast will be out there on atos.net, in the Investors section.

 

Forthcoming gatherings

June 26, 2020              Once-a-year Standard Meeting

July 27, 2020               Initially half 2020 success

Oct 22, 2020         Third quarter 2020 revenue

To be scheduled            2020 Analyst Day