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Atos — Atos Origin — Q1 2011 Earnings Presentation
39 slides from Atos's earnings presentation, May 10, 2011
Slide 1: Q1 2011 Revenues
Q1 2011 REVENUES Paris, May 10th, 2011 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, and the fish itself are registered trademarks of Atos Origin SA. January 2011 © 2011 Atos Origin. Confidential information owned by Atos Origin, to be used by the recipient only. This doc
Slide 2: Disclaimers
Disclaimers Atos Origin, scope at 10 May 2011: » The presentation 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 presentation due
Slide 3: Contents
CONTENTS 1. Q1 2011 Highlights 2. Q1 2011 Operational Performance 3. HTTS 4. SIS acquisition follow-up 5. Objectives 2011 3 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 4: Q1 2011 Highlights (1/2)
Q1 2011 Highlights (1/2) SIS Acquisition » Preparation ahead of schedule » Huge work delivered during the first quarter 2011 » TOP² Program ahead of schedule on some significant projects » Closing of the transaction on July 1st, 2011 Revenue » Q1 2011 revenue at EUR 1,228 million » Organic decline o
Slide 5: Q1 2011 Highlights (2/2)
Q1 2011 Highlights (2/2) Net Debt » Net Debt further reduced at EUR 115 million » Free Cash Flow at EUR 24 million compared to EUR 29 million in Q1 2010 HTTS » Solid growth in the quarter led by e-services and payment: +5.7% in line with total year objective TOP Program delivered » Cost optimization
Slide 6: SIS integration plan
SIS integration plan » Binding agreement signed with Siemens in February 2011 » Anti-trust authorities approval on March 25th, 2011. » Transaction planned to be completed on July 1st, 2011. » 24 work streams with 12 TOP² Program projects » Roadshow of Chairman and CEO in all the SIS countries » Comf
Slide 7: Contents
CONTENTS 1. Q1 2011 Highlights 2. Q1 2011 Operational Performance 3. HTTS 4. SIS acquisition follow-up 5. Objectives 2011 7 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 8: Commercial activity – Q1 2011
Commercial activity – Q1 2011 » Total order entry of EUR 1,241 M representing a book to bill ratio at 101% Total Systems Book to Bill Consulting MS+BPO HTTS Group Integration Q1 2011 101% 153% 98% 99% 102% Q1 2010 129% 134% 130% 123% 134% » Full qualified pipeline at EUR 2.7 B » Full backlog at EUR
Slide 9: Some customers’ contracts won in Q1 2011
Some customers’ contracts won in Q1 2011 Customers GBU Service Line Deals Large Public Agency UK BPO Medical Services D+S (Elbe) - Germany Germany Managed Services Full IT outsourcing KPN Benelux Managed Services Application Management Dept for Int. Dvlt. (DFID) UK Consulting Consulting project Firs
Slide 10: Some customers’ contracts renewals signed in Q1 2011
Some customers’ contracts renewals signed in Q1 2011 Customers GBU Service Line Deals Shell Benelux Managed Services Mainframe Solutions Equens Benelux Managed Services Flexible Workspace Tender Banco de Espana Spain Systems Integration Core Banking System Michelin France Systems Integration Applica
Slide 11: Q1 2011 revenue organic decrease at -1.3%
Q1 2011 revenue organic decrease at -1.3% In EUR Million Q1 2011 Q1 2010 ∆% Revenue 1,228 1,231 -0.2% Revenue at constant scope and exchange rates 1,228 1,244 -1.3% Quarterly statutory revenue evolution (in million euro) 1,316 1,264 1,231 1,210 1,228 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 11 Q1 2011 Revenues
Slide 12: Q1 2011 revenue performance by Service Line
Q1 2011 revenue performance by Service Line Consulting 4% Medical HTTS BPO 21% 3% Systems Integration Managed 36% Services 36% Revenue In EUR Million Q1 2011 Q1 2010 % growth Managed Services 449 454 -1.0% Systems Integration 438 452 -3.2% Hi-Tech Transactional Services 254 240 +5.7% Consulting 45 5
Slide 13: Q1 2011 revenue performance by Global Business Unit
Q1 2011 revenue performance by Global Business Unit Benelux 18% France 23% United Kingdom 18% Other countries Germany/ Atos 8% CEMA Worldline Spain 10% 17% 6% Total Revenue In EUR Million Q1 2011 Q1 2010 % growth France 281 289 -2.6% United Kingdom 224 220 +1.7% Benelux 220 234 -5.7% Atos Worldline
Slide 14: Net debt evolution (in EUR million)
Net debt evolution (in EUR million) 198 119 139 130 115 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 » Further reduction of net debt in Q1 2011 » New five year multi-currency revolving credit facility signed in April 2011 for 1.2 billion euro to renew the existing one due to expire in May 2012 14 Q1 2011
Slide 15: Headcount evolution
Headcount evolution Over the first quarter of 2011 » Direct staff almost stable in Q1 » Decreasing indirect staff to reduce cost base (TOP Program) » Hiring: +1,437 new employees up +50% vs. Q1 2010 +1,437 48,278 -1,319 47,894 -502 Opening staf f Hiring Leavers Dismiss and Closing staf f Restructuri
Slide 16: Headcount by GBU
Headcount by GBU Benelux 14% France 24% UK 13% Other Worldline countries 11% 19% GCEMA 8% Spain 11% headcount as of end of In EUR Million March 2011 Dec 2010 % change France 11,265 11,349 -0.7% Benelux 6,750 6,958 -3.0% United Kingdom 6,368 6,264 +1.7% Atos Worldline 5,446 5,459 -0.2% Germany/CEMA 3
Slide 17: Annualized attrition by quarter
Annualized attrition by quarter 12.3% 11.2% 10.6% 9.4% 8.3% Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 17 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 18: A sustainable reduction on the cost base
A sustainable reduction on the cost base -16% 59 57 55 51 51 47 -9% 32 29 28 28 20 20 Travel Cars Maintenance costs Rent & Lease Telecom costs Marketing / Fees expenses and others expenses Q1 2010 Q1 2011 FY 2010 -4% -13% -15% -9% +1% -17% FY 2009 -16% -4% -2% -15% +16% -16% 18 Q1 2011 Revenues - Pa
Slide 19: Lean management: a key contributor to competitive gains
Lean management: a key contributor to competitive gains 220 » Number of AO Lean experts deployed 175 170 December 2010 March 2011 December 2011 16,000 » Cumulated direct staff working under Lean management 11,000 9,000 15 per cent productivity gain expected, and material Delivery Quality increase 19
Slide 20: Contents
CONTENTS 1. Q1 2011 Highlights 2. Q1 2011 Operational Performance 3. HTTS 4. SIS acquisition follow-up 5. Objectives 2011 20 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 21: HTTS continued progress in business development
HTTS continued progress in business development » Executing on the business development plans for 2011 Significant marketing actions in the UK, Asia and in the NL Continued and expanding training to wider scope of sales and business development teams Recruitement and staffing of additional sales res
Slide 22: Pursued effort on sustained portfolio of HTTS leads and opportunities
Pursued effort on sustained portfolio of HTTS leads and opportunities in all countries Spain » Loyalty Programs » Fraud Management » Payment Services » M2M » e-commerce » Mobile Applications UK » Core Banking BPO » Core Insurance BPO » Corporate Payment Cards » Hospitality check-in / kiosks solution
Slide 23: HTTS: update on actions planned in 2011
HTTS: update on actions planned in 2011 1. Within Atos in its current scope: » Reinforcement of dedicated sales force » Recruitment and increased head-count in the new geographies of dedicated sales and pre-sales in UK, » Customization of offerings and specific Spain, NL, Asia developments (HTTS Acc
Slide 24: Contents
CONTENTS 1. Q1 2011 Highlights 2. Q1 2011 Operational Performance 3. HTTS 4. SIS acquisition follow-up 5. Objectives 2011 24 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 25: December 15th 2010 – July 1st 2011: integration priorities
December 15th 2010 – July 1st 2011: integration priorities » Keeping SIS business on track » Confirming expected synergies » Being fully operational as of July 1st 2011 » Setting up the Siemens partnership Siemens as a customer Siemens as a commercial partner » Designing the organization and closing
Slide 26: Keeping SIS business on track during the announcement to closing period
Keeping SIS business on track during the announcement to closing period » A comfort letter was sent by T. Breton and SIS CEO to all SIS sales force, to comfort sales staff in their job and that no change is expected for people in direct contact with customers. Business » Comfort meetings, calls and
Slide 27: Integration plan of SIS: 24 initiatives
Integration plan of SIS: 24 initiatives to achieve effective integration and operational efficiency SIS activity will be included in one of these workstreams Integration workstreams TOP2 workstreams I1 • Financial processes TOP² T1 • Global account Plan I2 • Social processes Sales T2 • Project Impro
Slide 28: Confirm plans to deliver expected synergies
Confirm plans to deliver expected synergies Current estimate Synergy area vs. due diligence Rationale •Support functions •Improved inside view of SIS G&A optimization costs and operating model •Removal of dual •SIS HQ’s almost 50% larger vs. due Headquarters diligence estimates •Purchasing •Supplier
Slide 29: Siemens partnership – Siemens as a Customer
Make the Siemens partnership a reality – Siemens as a Customer » A well established trusting relationship with Siemens CIO organization » Atos already engaged with Siemens AG on several new service opportunities » Action plan in place to build a strong partnership focused on - Satisfactory delivery
Slide 30: Siemens partnership – Siemens as a commercial partner
Make the Siemens partnership a reality – Siemens as a commercial partner Nominated 1 Atos senior Executive to lead the Siemens partnership 3 priority Market Development Boards selected, and specific accounts targeted within these markets (above 500M€ TCV already identified) 10+ R&D projects identifi
Slide 31: Being fully operational as from July 1st 2011
Being fully operational as from July 1st 2011 » Top² fully operationnal » Datacenter & Managed Services global factory Delivery optimization plan ready synergies » Tooling and methods selection complete for MS and SI » Restructuring plan timing on track (« eckpunktepapier » signed with IGM and Worki
Slide 32: Closing of the transaction and organization
Closing of the transaction and organization » EU antitrust clearance on March 25th, 2011, US antitrust clearance on March 18th, 2011 Deal closing » AMF prospectus filing in progress and on track » Solutions found for most deferred countries not part of main transaction scope » Organization design co
Slide 33: Main design principles of the new organization
Main design principles of the new organization »Build an organization that enables fast integration of Atos and SIS with minimum commercial and social disruptions »Set-up an organization that enables: A global customer focus and support (Market & Sales) while locally interfaced and served (Geographi
Slide 34: Project of new organization – Integration structure 2011
Project of new organization – Integration structure 2011 Group functions Markets & Sales GBU and SBU Public, Health Siemens Energy and GBU Germany and Account MRS Finance TMT utilities Transport Executive Global Sales & GBU France Marketing Support Siemens GBU UK/IR Finance Large Deal Global Team Pa
Slide 35: Contents
CONTENTS 1. Q1 2011 Highlights 2. Q1 2011 Operational Performance 3. HTTS 4. SIS acquisition follow-up 5. Objectives 2011 35 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 36: Operating Margin Outlook H1 2011
Operating Margin Outlook H1 2011 » The Group plans an operating margin rate up + 50 basis points for the first half of 2011 compared to 6 per cent in the first half of 2010. 36 Q1 2011 Revenues - Paris, May 10th, 2011 www.atosorigin.com
Slide 37: Objectives 2011 (1/2)
Objectives 2011 (1/2) (current Atos Origin Scope) Revenue » Considering the outcome from its large customers and an improving economic environment, the Group expects to return to a slight organic growth in 2011. Operating Margin » Operating Margin target is to increase by +50 to +100 basis points in
Slide 38: Objectives 2011 (2/2)
Objectives 2011 (2/2) With consolidation of SIS, expected as of 1 July 2011 (subject to Shareholders’ approval) » As soon as the transaction is completed, the new guidance for the year 2011 will include SIS (6 months expected in the second half of the year) » This guidance is expected to be in line
Slide 39: Questions?
Questions ? Paris, May 10th, 2011 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, and the fish itself are registered trademarks of Atos Origin SA. January 2011 © 2011 Atos Origin. Confidential information owned by Atos Origin, to be used by the recipient only. This document