First quarter of 2020 – Atos

A resilient profile and a sturdy stability sheet to face an unprecedented condition Earnings at

A resilient profile and a sturdy stability sheet to face an unprecedented condition

Earnings at € 2,834 million

-.eight% organic and natural progress

Guide to monthly bill ratio at 103%

Renewals of significant contracts in North The usa

Acceptable small business blend to assistance prospects in Covid-19 context

Essential expense actions remaining carried out to safeguard functioning margin

SPRING transformation software to an Marketplace solution perfectly on monitor

Update of 2020 aims submit Covid-19

 

Paris, April 22, 2020,

Atos, a world leader in digital transformation, these days announces the revenue of its initially quarter of 2020.

Elie Girard, CEO, stated: “In this unprecedented surroundings in which uncertainty prevails, our initially priority has been to safeguard our personnel while supplying full continuity of support to our consumers. The Group is solidly positioned to navigate smoothly by means of the crisis many thanks to deep customer interactions across all industries, a resilient small business blend and a robust stability sheet that supplies a sturdy monetary flexibility.

Our one hundred ten,000 colleagues across the entire world have furnished an fast and exceptional reaction to customers’ challenges and need to have for assistance by means of our “Always Ready” software built by now considering that the beginning of the year. Now our minds and efforts are turning to the submit-Covid instances, actively getting ready for the “new normal” which will see an acceleration in certain customers’ demands, particularly info platforms, cybersecurity, cloud migration, digital office and decarbonization.

We revise these days our aims for 2020 demonstrating the resilience of the Group and the willingness to share any effects rather across stakeholders. I am persuaded that Atos will arise from this world crisis much better than at any time and prepared to move ahead to the subsequent step.”

Q1 2020 revenue was € 2,834 million, down -.eight% organically. In the context of Covid-19 crisis and restrictions and lockdowns in March in most of the nations around the world in which the Group operates, revenue decreased only slightly many thanks to the resilient profile of its businesses based mostly on multi-year contracts mixed with its strong small business in Huge Knowledge and Cybersecurity. In addition, and in spite of the crisis, the Group accelerated its commercial dynamism with order entry at € 2,908 million top to a e book to monthly bill ratio of 103%, significantly up when compared to past year at 86%.

Q1 2020 revenue performance by Marketplace

In € million Q1 2020 Q1 2019* Natural and organic
evolution
Manufacturing 539 555 -2.9%
Monetary Companies & Insurance coverage 527 542 -2.6%
Public Sector & Protection 584 566 +3.2%
Telecom, Media & Technological know-how 443 439 +.eight%
Assets & Companies 418 416 +.4%
Health care & Daily life Sciences 323 340 -4.9%
Total Group 2,834 2,858 -.eight%
* At consistent scope and trade charges

 

Manufacturing attained € 539 million of revenue, down -2.9% at consistent scope and trade charges. The Marketplace benefitted from a fantastic performance in Automotive with the ramp-up of a German car organization and Rheinmetall on info management contracts, compensating the effects in Daimler owing to Covid-19 and the ramp down of PSA. Conversely, Manufacturing was impacted by lower volumes with Siemens, a slowdown in the Aerospace sector owing to Covid-19, and several shifts of products revenue to the stop of the quarter.

Monetary Companies & Insurance coverage revenue was € 527 million in the initially quarter 2020, down by -2.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as perfectly as the enhancement of exercise with a payment organization in France which have far more than compensated for the reduction of volumes from banking establishments in Central Europe. Expanding markets suffered from non-recurring revenue executed past year in APAC and Middle East & Africa. In North The usa, venture based mostly routines decrease by now noticed in previous quarters was accelerated in March owing to decisions from several Monetary Companies corporations to postpone or lessen discretionary bills in the context of Covid-19.

Public Sector & Protection revenue was € 584 million, up +3.2% at consistent scope and trade charges. The progress was driven by the sturdy performance recorded in Northern Europe, many thanks to the continuation of the deal with European Middle for Medium array Weather forecast as perfectly as with EU Lisa and good info platform in Benelux. North The usa reached security regardless of lower volumes, many thanks to extra revenue on existing contracts. The condition was far more difficult in Southern Europe, impacted by the ramp-down of Superior Overall performance Computing exercise as perfectly as non-recurring revenue executed past year. Central Europe was negatively impacted by lower volumes, and lastly Expanding Markets was impacted by revenue recorded past year for the Tokyo Olympic Games planning and not recurring this year.

Telecom, Media & Technological know-how attained € 443 million, up +.eight% organically, with a contrasted performance by geography and by exercise. Superior Tech & Technological know-how posted a sturdy progress, driven by Unified Communication & Collaboration choices in Central Europe, sustained by organic and natural progress of freshly obtained organization Maven Wave in North The usa and deal ramp-up with a large associate, as perfectly as extra revenue in Southern Europe. Media increased as perfectly, benefitting from new small business enhancement, coupled with larger volumes with existing prospects in North The usa. Telecom exercise was largely impacted by some ramp-downs in Southern Europe.

Earnings in Assets & Companies attained € 418 million and increased by +.4% organically. Small business in Energy & Utilities sector fueled the progress. In individual, the Marketplace shipped a Superior Overall performance Pc in South The usa. Digital office providers ramped-up with a significant Energy service provider in North The usa and with National Grid in Northern Europe. The condition in Retail, Transportation & Hospitality sectors was far more difficult in the context of Covid-19. Without a doubt, while the ramp-up of a new IoT deal signed in the area of predictive maintenance benefitted to North The usa, the Marketplace confronted quantity reductions in Europe.

Health care & Daily life Sciences revenue was € 323 million, down by -4.9% when compared to Q1 2019, impacted by quantity reductions on extremely certain contracts in equally North The usa and Northern Europe, while the market benefitted from the ramp-up of a world deal with Bayer and a digital office deal signed past year in Central Europe, and the ramp-up of an Australian Public Agency deal in Expanding Markets. Southern Europe benefitted from a sturdy exercise in digital assignments and Superior Overall performance Computing.

 

Q1 2020 revenue performance by Regional Small business Unit

 

In € million Q1 2020 Q1 2019* Natural and organic
evolution
North The usa 681 699 -2.6%
Northern Europe 698 696 +.3%
Southern Europe 594 609 -2.6%
Central Europe 667 660 +one.%
Expanding Markets 194 192 +one.%
Total Group 2,834 2,858 -.eight%
* At consistent scope and trade charges

The initially quarter of 2020 confirmed different revenue evolution by Regional Small business Units which can be summarized as follows:

  • In North The usa, revenue attained € 681 million, reducing by -2.6% organically largely coming from Covid-19 induced venture stops and quantity reductions in several Industries. The Small business Unit reached progress in Telecom, Media & Technological know-how and Assets & Companies many thanks to new brand, larger volumes and ramp up of existing contracts
  • In Northern Europe, revenue was roughly stable at € 698 million. Potent small business was recorded in Public Sector & Protection largely led by the continuation of the HPC deal with European Centre for Medium Variety Weather Forecast, as perfectly as by deliveries to European Union Establishments. Telecom, Media & Technological know-how and Manufacturing confronted some contracts ending and Health care & Daily life Sciences a reduction on Small business Process Outsourcing contracts
  • In Southern Europe, revenue attained € 594 million, reducing by -2.6% Health care & Daily life Sciences posted a double-digit progress many thanks to digital assignments shipped and Superior Overall performance Computing routines. The geography was impacted by non-recurring revenue also on Superior Overall performance Computing routines executed past year in several Industries
  • In Central Europe, the geography increased organically by +one.% top to a € 667 million Manufacturing benefitted from several ramp-up of infrastructure contracts and extra assignments. Earnings in Telecom, Media & Technological know-how also increased, driven by Unified Communication & Collaboration small business. Health care & Daily life Sciences posted a double-digit progress largely fueled by new contracts. Public Sector & Protection was impacted by non-recurring revenue and assignments reached past year while new assignments in SAP HANA and in Digital ended up executed in Germany and in Austria. Finally, Assets & Companies was impacted by a lower desire in Unify Communication channels
  • Expanding Markets attained € 194 million revenue, +one.% Manufacturing posted a strong progress, pushed by a larger stage of revenue as perfectly as much better desire in digital assignments largely in Asia-Pacific and South The usa. Earnings in Resource & Companies strongly increased fueled by Superior Overall performance Computing exercise in South The usa while the condition was far more difficult in Monetary Companies largely in Asia Pacific.

Q1 2020 revenue performance by Division

 

In € million Q1 2020 Q1 2019* Natural and organic
evolution
Infrastructure & Knowledge Administration one,558 one,566 -.5%
Small business & Platform Methods one,016 one,069 -4.9%
Huge Knowledge & Cybersecurity 259 223 +16.3%
Total Group 2,834 2,858 -.eight%
* At consistent scope and trade charges

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

The certain condition owing to Covid-19 pandemic needed a strong small business continuity for crucial infrastructures for its prospects. Without a doubt, the Division recorded a sturdy desire on Digital Workplace options (accessing programs from any where), organization conversation choices with Unified Collaboration & Communication, network connections, and many others. These routines are joined to the remote working that has been put in area by a great deal of businesses to face the lockdown and keep their exercise.

Finally, in the present context, the Division recorded much less revenue generated by products revenue and fertilization in existing contracts in March.

In Small business & Platform Methods (B&PS) revenue was € 1,016 million, -4.9% organically. As a reminder, the Division was down -one.2% in This fall 2019 owing to the headwinds in Monetary Companies in North The usa as perfectly as in Automotive market in Germany, and hence did not hope any advancement in the beginning of 2020 even just before Covid-19.

In the new context of Covid-19, the Division had to face a slowdown in most of the Industries. Without a doubt, this small business phase is much far more dependent from the cycle and prospects started out in March to postpone discretionary assignments. The Group considers that the most impacted routines will be Technological know-how Professional Companies necessitating engineers working on purchaser web-sites, that simply cannot be executed on a remote method (circa 30% of Small business & Platform Methods revenue). On the opposite, Software Progress and Routine maintenance, based mostly on long time period contracts should be resilient (circa forty% of Small business & Platform Methods revenue). In between, a large portion of crucial Digital Jobs (circa 30% of Small business & Platform Methods revenue) can be executed on a remote method, but the quantity of the small business will count in the subsequent months from the purchaser calls for on new assignments.

The small business in Huge Knowledge & Cybersecurity (BDS) remained sturdy with revenue up +16.3% organically at € 259 million in the initially quarter of 2020. In the present context, the remote working as perfectly as the improve of cyberattacks led businesses to strengthen the security of their infrastructure and info. As examples, prospects questioned for far more options of identification in fast method, and consulting on the solidity of their security infrastructure.

In Huge Knowledge, there was no discontinuity in the supply chain many thanks to pro-lively stock management. The desire continues to be sturdy in Superior Overall performance Computing. As an illustration, remote entry to SAP HANA needs extra processing electric power and hence larger sized demands of Sequana S in-memory servers. Finally, Mission Vital Process small business also recorded a substantial revenue progress.

Business exercise

All through the initially quarter of 2020, the Group order entry attained € 2,908 million symbolizing a Guide to Bill ratio of 103%, when compared to 86% reached around the exact interval past year.

The most important new contracts signed around the interval ended up notably in North The usa with a large American organization in Protection Sector (Telecom, Media & Technological know-how), in Central Europe with Norddeutsche Landesbank (Monetary Companies & Insurance coverage) and a world european pharmaceutical organization (Well being & Daily life Sciences) and in Southern Europe with a significant utility in France and with Ile-de-France Mobilités (Assets & Companies), as perfectly as with a French banking establishment (Monetary Companies & Insurance coverage).

Contract renewals of the quarter included large signatures with notably the initially portion of the renewal of Texas Section of Information and facts Assets deal (Public Sector & Protection), the renewal of Conduent deal (Telecom, Media & Technological know-how) in North The usa, a deal with a International European agency in money products for SAP HANA (Manufacturing) in Central Europe, as perfectly as with the French UGAP (Public Sector & Protection) in Southern Europe.

In line with this dynamic commercial exercise, the full backlog amounted to € 22.one billion at the stop of March 2020, symbolizing one.9 year of revenue. The full skilled pipeline attained € seven.6 billion, symbolizing seven.eight months of revenue.

Human methods

The total headcount was 108,602 at the stop of March 2020, broadly stable when compared to 108,317 at the stop of December 2019.

In the initially quarter of 2020, the Group hired 5,043 workers, largely in offshore nations around the world.

How Atos handles Covid-19 effects

Considering the fact that stop of January, the Group management, supported by Group Human Assets, has been focusing on the health and basic safety of personnel while ensuring a appropriate implementation of pre-defined small business continuity programs in every single Division.

The Group also activated the “Always Ready” software, pulling together all Group options precisely adapted to this distressed condition and remaining proactively presented to prospects to enable them go by means of the crisis: assistance to generalized homeworking which includes collaboration functions, certain assistance to community & health establishments, reinforcement of cybersecurity protections, and many others. Customers’ feedback and pleasure with regards to Atos teams reactivity has been overwhelmingly positive. Atos is also involved into several governmental assignments across the entire world to struggle versus the virus, and prepare the progressive reduction of restrictions and lockdowns.

To safeguard its functioning margin, the Group has taken sturdy actions on its expense base in the subsequent regions:

  • Potent centralized checking of personnel expenses (hiring freeze, cancellation of income boosts, effects on variable compensation, holidays, and many others.)
  • Substitution of subcontractors by individual freed up workers
  • Cancellation of non purchaser associated discretionary bills
  • Potent saving software on non personnel expenses.

In total, the Group released a software symbolizing a total amount of money of c. 400 million euros of financial savings in 2020.

Up-to-date 2020 aims submit Covid-19

As the 2020 aims disclosed on February 19, 2020 ended up pre Covid-19 outcome, the Group updates these days its a few aims for the full year 2020, based mostly on the present macroeconomic scenario of a progressive recovery around H2 2020 and 2021, as perfectly as the management’s each day discussions with Group prospects:

  • Earnings organic and natural evolution: between -2% and -4% (as opposed to c. +2% pre Covid-19)
  • Functioning margin charge: 9% to 9.5% of revenue (as opposed to +20 bps to + forty bps previously mentioned 2019 (ten.3% described) pre Covid-19)
  • Absolutely free money movement: € .5 billion to € .6 billion (as opposed to c. € .seven billion pre Covid-19)[*].

The Group suspends its targets for 2021, the past year of the a few-year plan introduced at the Trader Day held on January 30, 2019. The Group will existing its vision as perfectly as its mid-time period targets at the 2020 Analyst Day (date to be rescheduled).

Postponement of Yearly Common Assembly and fantastic cancellation of dividend payment in 2020

Because of to the fantastic instances joined to the Covid-19, the Board of Directors, which met on March 31, 2020, has decided to postpone the Yearly Common Assembly at first scheduled on May possibly 14, 2020 to June 26, 2020.

In these unprecedented instances, all through its session on April 21, 2020, the Board of Directors took the fantastic determination not to propose the one.forty euro for every share dividend which was at first considered to be submitted to the Yearly Common Assembly. In addition, the Main Government Officer as perfectly as other users of the Common Administration Committee have decided to lessen by 30% their compensation all through the present a few-month interval from March to May possibly 2020. The Chairman of Atos’ Board of Directors has produced the exact determination.

The Group confirms that the cancellation of the dividend this year is an exception to its dividend coverage with a fork out-out ratio between 25% and 30% of Net money Group share.

 

Appendix

Earnings at consistent scope and trade charges reconciliation

In € million Q1 2020 Q1 2019 % transform
Statutory revenue 2,834 2,818 +.6%
Trade charges outcome 26  
 
Earnings at consistent trade charges 2,834 2,843 -.3%
   
Scope outcome 14  
Trade charges outcome on obtained/disposed perimeters one  
Earnings at consistent scope and trade charges 2,834 2,858 -.eight%
       

Scope effects amounted to €+14 million for revenue and are largely associated to the acquisition of Maven Wave, consolidated as of February one, 2020 (2 months for €+eighteen million), the acquisition of IDnomic, consolidated as of Oct one, 2019 (3 months for €+4 million), the acquisition of X-PERION, consolidated as of December one, 2019 (3 months for €+2 million), the disposal of some certain Unified Communication & Collaboration routines mostly in Q1 2020 (total restatement of €-4 million) as perfectly as former ITO routines in the Uk beginning of H2 2019 (3 months for €-4 million), and lastly the disposal and decommissioning of non-strategic routines inside of CVC.

Currency trade charges effects mostly came from the American greenback as perfectly as the British pound and positively contributed to revenue for €+26 million.

 

Conference get in touch with

Right now, Wednesday, April 22, 2020, the Group will hold a conference get in touch with in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in order to comment on Atos’ Q1 2020 revenue and answer issues from the monetary community.

You can join the webcast of the conference:

  • on net, in the Investors segment
  • by smartphones or tablets by means of the scan of:
  • by phone with the dial-in, 5-ten minutes prior the setting up time:
    • France             +33 one 70 70 07 81       code 12652364
    • Germany             +49 sixty nine 2222 2625       code 12652364
    • Uk             +44 844 481 9752       code 12652364
    • US             +one 646 741 3167         code 12652364
    • Other nations around the world +44 2071 928338        code 12652364

Immediately after the conference, a replay of the webcast will be offered on atos.net, in the Investors segment.

 

Forthcoming gatherings

June 26, 2020              Yearly Common Assembly

July 27, 2020               Very first 50 % 2020 success

Oct 22, 2020         Third quarter 2020 revenue

To be scheduled            2020 Analyst Day