Atos Se · EURONEXT:ATO
Atos — Atos Origin — FY2008 Earnings Presentation
57 slides from Atos's earnings presentation, Feb 18, 2009
Slide 1: Atos Origin Full Year 2008 Results
Atos Origin Full Year 2008 Results February 18th, 2009 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, and the fish itself are registered trademarks of Atos Origin SA. February 2009 © 2009 Atos Origin. Confidential information owned by Atos Origin, to be used by the recipie
Slide 2: Disclaimer
Disclaimer » This presentation contains further forward-looking statements that involve risks and uncertainties concerning the Group’s expected growth and profitability for 2008 and following years. Actual events or results may differ from those described in this presentation due to a number of risk
Slide 3: Agenda
Agenda » 1. FY’08 Results » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 3 Atos Origin FY 2008 / Feb. 18, 2009
Slide 4: Agenda: FY'08 Results
Agenda » 1. FY’08 Results » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 4 Atos Origin FY 2008 / Feb. 18, 2009
Slide 5: 2008 Highlights
2008 Highlights » Financial performance » Revenue at EUR 5,479 M with an organic growth at +5.6% despite slowdown in H2 » 68% of total revenue is recurring business, 93% European basis, 77% covered by 4 main sectors » Operating margin at EUR 261 M (4.8% of revenue), representing an increase of +11%
Slide 6: Agenda: Operational Performance
Agenda » 1. FY’08 Results » Operational Performance » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 6 Atos Origin FY 2008 / Feb. 18, 2009
Slide 7: Full year 2008 revenue organic growth at +5.6%
Full year 2008 revenue organic growth at +5.6% Exchange 2007 % organic In € Million 2008 2007 Δ% Disposals rates proforma growth Statutory scope 5,623 5,855 -4.0% (160) (363) 5,332 +5.5% Italy (1 month in 2008 and 12 months in 2007) (20) (261) 240 (21) AEMS Exchange (7 months in 08 and 12 mths in 07
Slide 8: Full year 2008 revenue organic growth
Full year 2008 revenue organic growth +5.6% In MEUR Organic growth 5,855 (261) 6,000 (247) +291 (156) 5,479 (4) 5,188 5,000 4,000 3,000 2,000 FY 07 Italy AEMS Exchange Other FY 07 Organic FY 08 reported Exchange rates disposals new scope growth revenue impact 8 Atos Origin FY 2008 / Feb. 18, 2009
Slide 9: Solid backlog and increasing pipeline
Solid backlog and increasing pipeline » Total order entry of EUR 5.4 billion representing a book to bill ratio at 98% » Full backlog at EUR 7.4 billion, representing 1.4 year of revenue » 12 months backlog above EUR 3 billion, increase by +2% vs. 2008 » Full qualified pipeline at EUR 2.7 billion, in
Slide 10: Latest customers' contracts won in Q4 2008
Latest customers’ contracts won in Q4 2008 Service Customers Country Deals line Vivarte France MO System support, infrastructure management Insurance company France SI New IT system Ministry of Finance France MO Renewal Managed Services Helios Major oil company France MO Full infrastructure services
Slide 11: Operating Margin
Operating Margin (M€) 260.5 250 235.2 200 150 138.3 122.2 129.6 105.6 4.8% 5.1% 100 4.9% 4.5% 4.5% 4.1% 50 0 H1 H2 FY OM 2007 OM 2008 NB: figures based on new scope: 2008 and 2007 figures at same perimeter and exchange rates i.e., excluding Italy and AEMS and at 2008 exchange rates. 11 Atos Origin F
Slide 12: 2008 performance by service line
2008 performance by service line Revenue Operating Margin Operating Margin % % organic In € Million FY 2008 FY 2008 FY 2007 FY 2008 FY 2007 growth Consulting 349 +1.0% 16.7 18.2 4.8% 5.3% Systems Integration 2,202 +5.4% 86.3 92.6 3.9% 4.4% Managed Operations 2,928 +6.4% 240.2 240.4 8.2% 8.7% Corpora
Slide 13: 2008 performance by geographical area
2008 performance by geographical area Revenue Operating Margin Operating Margin % % organic In € Million FY 2008 FY 2008 FY 2007 FY 2008 FY 2007 growth France 1,580 +6.9% 77.1 65.5 4.9% 4.4% United Kingdom 950 +9.7% 69.5 49.6 7.3% 5.7% The Netherlands 1,063 -1.6% 90.6 127.1 8.5% 11.8% Germany + Cent
Slide 14: Headcount evolution
Headcount evolution 51,704 (3,109) (6,581) +10,954 50,975 (1,993) Staff as of Change in Leavers Lay-offs & Hirings Staff as of 31 Dec. 07 scope dismissals 31 Dec. 08 14 Atos Origin FY 2008 / Feb. 18, 2009
Slide 15: Agenda: Financial Performance
Agenda » 1. FY’08 Results » Financial Performance » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 15 Atos Origin FY 2008 / Feb. 18, 2009
Slide 16: Income statement
Income statement In € Million FY 2008 FY 2007 Comments Revenue 5 623 5 855 OMDA 477 505 % revenue 8.5% 8.6% Operating Margin 266 271 % revenue 4.7% 4.6% Pensions 17 Plan amendment in the UK (EUR +55 M), Impairment in the NL (EUR -39 M) Restructuring and rationalization (103) (98) In 2008, mainly reg
Slide 17: Cash flow statement
Cash flow statement In € Million FY 2008 FY 2007 Comments OMDA 477 505 4.2% of 2008 revenue vs 5.1% in 2007. IT equipments in operating leases reduced Net capital Expenditures (234) (300) from EUR 53 M in 2007 to EUR 23 M in 2008 Operating Cash Capacity 243 205 Increase of +19% DSO reduced from 67 d
Slide 18: Simplified Balance Sheet
Simplified Balance Sheet 31 Dec 31 Dec In € Million Comments 2008 2007 Goodwill 1,511 1,868 Impairment in France and Spain and exchange rates effect Intangible assets 78 75 Tangible assets 454 437 Further reduction of IT Operating leases by EUR 30 M Non-current financial assets 68 71 Net deferred ta
Slide 19: Atos Origin financing structure well suited for the years to come
Atos Origin well below banking covenants » Credit lines of EUR 1.1 Bn until May 2012 end 2008 end 2007 covenant » Leverage ratio 0.64 0.67 < 2.5 (net debt / OMDA) » Interest cover ratio 9.3 9.5 >4 (operating margin / net cost of financial debt) Atos Origin financing structure well suited for the yea
Slide 20: Agenda
Agenda » 1. FY’08 Results » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 20 Atos Origin FY 2008 / Feb. 18, 2009
Slide 21: A group with key strengths
A group with key strengths » Strong customer relationships with a strong base of recurring revenue » Atos Worldline » Renewal of multiple multi-year outsourcing contracts » Strong Application Management Capabilities » A strong backlog and quality pipe » Dedicated management and staff » A solid Europ
Slide 22: With nevertheless strong improvement areas
With nevertheless strong improvement areas » Silo based and poorly integrated group » Limited pooling of global resources » Insufficient global delivery & offshore » Room for progress in our ability to execute global improvement programs » Large innovation skills but too spread throughout the compan
Slide 23: Changing Atos Origin to reach new level of ambition
Changing Atos Origin to reach new level of ambition I. Adapt the Group governance » A new Board of Directors with a Chairman & CEO II. Transform the company into » A new organization a globally integrated group III. Focus on improving » Launch of the Total Operational operational performance Perform
Slide 24: Agenda: Changing Atos Origin
Agenda » 1. FY’08 Results » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 24 Atos Origin FY 2008 / Feb. 18, 2009
Slide 25: New group governance
n New group governance » Shareholders strongly supported transformation to Board of Directors » All proposed candidates elected as Directors by shareholders » René Abate » Thierry Breton » Pasquale Pistorio » Behdad Alizadeh » Dominique Mégret » Vernon Sankey » Nicolas Bazire » Bertrand Meunier » Je
Slide 26: Key objectives of the new organization
o Key objectives of the new organization Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin New New organization organization to to leverage levera
Slide 27: Atos Origin's current operational model
o Atos Origin’s current operational model Starting to work together CEO CEO Support Support functions functions Global Sales C & SI FR NL GCE SP UK ROW MEV AWL GMS 27 Atos Origin FY 2008 / Feb. 18, 2009
Slide 28: Atos Origin's new operational model
o Atos Origin’s new operational model A fully integrated company leveraging on its scale and strengths CEO CEO Global Sales & Markets GBU GBU GBU GBU GBU GBU GBU GBU FM Benelux GCE UK Iberia ROW AWL MEV Global Service Lines (Consulting, SI, SAP, MS) Global Factories Global functions (Innovation, HR,
Slide 29: 10 key organization decisions
o 10 key organization decisions Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin New New organization organization to to leverage leverage on on
Slide 30: 10 key organization decisions: Global Sales & Markets
o 10 key organization decisions Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin 1. 1. Creation Creation of of aa strong strong Global Global Sal
Slide 31: 10 key organization decisions: Global Service Lines
o 10 key organization decisions Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin 4. 4. Creation Creation of of Global Consulting, aa Service Glob
Slide 32: 10 key organization decisions: Innovation
o 10 key organization decisions Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin 7. 7. Creation Creation of of aa Global Global Innovation Innova
Slide 33: 10 key organization decisions: Support functions
o 10 key organization decisions Industrialize our Boost our global and local innovation delivery potential capabilities Implement a Move to an global Markets integrated and Clients dimension Fully integrated operating model Atos Origin 9. 9. Implementation Implementation of of aa solid solid line re
Slide 34: Atos Origin's Corporate Chart
o Atos Origin’s Corporate Chart BOARD BOARD GBU Finance FM IT TOP Program GBU Benelux Global Global SI GBU Sales&Markets (including Global SAP) GCE HR GBU Chairman Chairman UK SEVP SEVP & SEVP SEVP Global Global Functions Functions & Global Global Operations Operations CEO CEO Gilles Gilles Grapinet
Slide 35: TOP: Total Operation Performance through four strong levers
p TOP: Total Operation Performance through four strong levers 1. Leveraging the Integrated Global Atos Origin concept to better serve our customers and generate synergies through simplification and standardization across the organization 2. Developing “Lean management” to close the productivity gap
Slide 36: Program structured in transversal projects
p Program structured in 20 transversal projects… Top management PMO C. Dehelly Germany France UK NL Spain Worldline RoW C. Europe T1. Globalize organization and improve performance of Business Consulting BUs Sl T2. Increase SI competitiveness T3. Leverage global SAP and boost growth T4. Implement le
Slide 37: Acting on operational levers - Examples
p Acting on operational levers - Examples TOP To project Driver From (today) benchmark T1 » Utilization rate ~63% 70%+ C&Sl T2 » Offshoring ratio in SI 12.5% 25%+ T4 » Agent utilization in helpdesk ~55% 65%+ MO T5 » Self resolution usage <5% 20%+ Purchasing T9 » M² per employee ~15 ~9 T12 Support »
Slide 38: TOP scope
p TOP scope 2008 Actuals, € millions 4 Non OMDA 1 Sales personnel expenses Non personnel Restruct. expenses Internal staff Capex WC Subcontracting Internal staff 5 Cash 3 Indirect 2 Direct personnel Subcontracting personnel costs costs 38 Atos Origin FY 2008 / Feb. 18, 2009
Slide 39: Key messages TOP
p Key messages TOP TOP = (3o3 + new Levers + more Ambition) x Speed A» A program made of 20 transversal work streams focused on operational performance to increase operating margin by exceeding gains promised to customers B» A detailed program activating untouched levers at Atos Origin across the wh
Slide 40: A vision built on our environment
q A vision built on our environment Analysis of Vision our environment for Atos Origin Economical » Reactivity vs. the Crisis Technological » Business mix Societal » Business development axis 40 Atos Origin FY 2008 / Feb. 18, 2009
Slide 41: Analysis of the Crisis
q Analysis of the Crisis Macro-economic standpoint » Will be long & tough » Will shape a new economic order in numerous domains » New balance of powers between geographies – US / Europe / Asia » New regulations & new economic models for identified business sectors – Banking & Finance » New consolida
Slide 42: Atos Origin's response to the Crisis
q Atos Origin's response to the Crisis: a short term, very reactive management » Adaptation of the group's governance » Change of corporate governance model and by-laws » More appropriate compensation rules » Launch of the TOP program – Execution speed » Alignment of management tools & incentives to
Slide 43: Technology & Societal Evolution
q Technology & Societal Evolution 43 Atos Origin FY 2008 / Feb. 18, 2009
Slide 44: Information Technology Evolution
q Information Technology Evolution TODAY Pervasive Ubiquity Collaboration Information Communities Consumer IT Productivity Corporate IT Cloud computing Computational IT IBM Integrated Mainframe Internet Circuit PC Eniac Object Internet 1943 1968 1993 2015 44 Atos Origin FY 2008 / Feb. 18, 2009
Slide 45: A disruption in information technologies
q A disruption in information technologies Computing / Storage » Moore's Law is now reaching a plateau » New computing architectures are now required » Parallel / Grid computing » Capital intensive mega data centers X Corporations will rethink the way they look at their infrastructure From IT infras
Slide 46: A disruption in information technologies (2)
q A disruption in information technologies (2) Networks » Strong communication infrastructure » High and cheap bandwidth » Mobile X Ubiquity » Key enabler for » Cloud computing Cloud Computing » SaaS infrastructures From systems integration … ... To services integration industry 46 Atos Origin FY 20
Slide 47: From a B2C vision to a C2B reality
q From a B2C vision … to a C2B reality From To » Corporations delivering technology » Higher IT equipment of individuals innovation to their customers, employees than within corporate environment and to the citizens » PC performance, network bandwidth, 3G & Mobile networking » IT innovations more an
Slide 48: From CRM to Customer Community Relationship Management
q From CRM to Customer Community Relationship Management 48 Atos Origin FY 2008 / Feb. 18, 2009
Slide 49: Atos Origin to align its Services with major IT trends
q Atos Origin to align its Services with major IT trends Leverage current strengths and positionning to grasp Managed » Cloud Computing Services » Saas opportunities Reinforce Consulting » to assist customers for new community IT services based » to provide business expertise for Service Integration
Slide 50: Atos Worldline to play a key role for the Group's business development
q Atos Worldline to play a key role for the Group's business development Transactional Payments e-Services CRM » Leading European » Transaction based » Multi-channel payment processor business models interactions » Strong position in » Mailbox hosting » Multi-device France, Belgium & services German
Slide 51: Structurally favorable environment to sustain development
q Despite short term conditions, a structurally favorable environment to sustain the development of Atos Origin » Economic environment: Increased customer opportunities for our activities » Technological evolutions: Customers to shift to actors well positioned on recurring services » Societal transf
Slide 52: Vision for Atos Origin
q Vision for Atos Origin Atos Origin's Vision Environment Response for Atos Origin Crisis Business Mix » Low visibility » Price pressure » MS: Cloud & Utility » Consolidation » Outsourcing » SI: Expertise & » New business models Differentiation Technology Reactivity » Consulting: Business & Innovati
Slide 53: Agenda: Outlook and Objectives
Agenda » 1. FY’08 Results » 2. Conclusions on FY’08 performance » 3. Changing Atos Origin » 4. Outlook and Objectives 53 Atos Origin FY 2008 / Feb. 18, 2009
Slide 54: Backlog coverage on 2009 revenue
Backlog coverage on 2009 revenue Full Backlog growth in 2008 : -3% of which backlog growth for 2009 : +2% 2009 revenue coverage as of Dec 08 2008 revenue coverage as of Dec 07 Backlog 25% Pipe 29% To find 55% 58% 17% 16% 2009 starts with a higher backlog coverage 54 Atos Origin FY 2008 / Feb. 18, 20
Slide 55: Planned evolution of group resources for 2009
Planned evolution of group ressources for 2009 (FTE) 53,400 4,500 50,400 +22% 5,500 Offshore & Nearshore 39,700 -7% Direct Onshore 36,900 & Closeshore 3,800 -26% 2,800 Subcontractors 5,400 -4% 5,200 Indirect 2008 2009 55 Atos Origin FY 2008 / Feb. 18, 2009
Slide 56: Objectives for 2009
Objectives for 2009 » Revenue: slight decrease compared to 2008 at same scope and exchange rate » Operating margin: ambition to improve by +50 to +100 basis points compared to 2008 » Cash generation: objective of a positive free cash flow 56 Atos Origin FY 2008 / Feb. 18, 2009
Slide 57: Atos Origin Full Year 2008 Results
Atos Origin Full Year 2008 Results February 18th, 2009 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, and the fish itself are registered trademarks of Atos Origin SA. February 2009 © 2009 Atos Origin. Confidential information owned by Atos Origin, to be used by the recipie