Atos Se · EURONEXT:ATO
Atos — Atos Origin — Merger or Acquisition (December 2010)
53 slides from Atos's merger presentation, Dec 15, 2010
Slide 1: Atos Origin and Siemens to create a European IT Champion
Atos Origin and Siemens to create a European IT Champion Paris, December 15, 2010
Slide 2: Agenda
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 3: Disclaimer
Disclaimer »Any statements made in this presentation that are not statements of historical fact, including statements about Atos Origin' beliefs and expectations and statements about Atos Origin' proposed acquisition of the SIS business, are forward-looking statements and should be evaluated as such
Slide 4: Atos Origin and Siemens IT Services create today #1 European IT player
Executive summary Atos Origin and Siemens IT Services create today #1 European IT player New Company: €8.7 bn – 78,500 FTEs – 40+ countries Transactional IT The first era of » HTTS: solutions for a information transactional world #1 in Europe technology is ≈ €1 bn Est. » Specialised ending: business
Slide 5: A significant step to create the #1 European IT services player
Executive Summary A significant step to create the #1 European IT services in Europe and #7 in the World 2009 Europe revenues (€ bn) 2009 Worldwide revenues (€ bn) 1. IBM 13.3 1. IBM 39.6 2. HP-EDS 9.0 2. HP-EDS 24.9 3. Fujitsu 16.8 New Company 8.2 4. Accenture 15.1 3. Capgemini 6.6 5. CSC 11.5 4. A
Slide 6: A unique Managed Services asset favouring leading position in Cloud computing
Executive summary A unique Managed Services asset favouring leading position in Cloud computing » #2 in Managed Services in Europe (€4.5 bn) and #1 European: Data-Center capacity x2, Global factory scale x2.5, 90.000 servers, 50.000 managed Network devices… » Also #2 European in SI 2009 Europe MS re
Slide 7: Transaction structure
Executive Summary Transaction structure Amount Structure Comments » €600 m » 12.5 million » Based on last 6 month average stock shares (15% of price Atos future » Long term commitment of Siemens to capital) realise successful integration of SIS » Lock-up period of 5 years for Siemens » €186 m cash »
Slide 8: Why will this deal create value?
Executive summary Why will this deal create value? Atos Origin and Siemens have concluded a long term strategic partnership » The biggest long term IT contract ever concluded worldwide on MS & SI: 7 years (2011-2017), €5.5 bn (minimum) » Siemens will support Atos development strategy in specialised
Slide 9: How SIS fits with Atos' strategy?
Executive Summary How SIS fits with Atos' strategy? 2009 2010 2011 2012 2013 GROUP HUGE COMPETITIVE POTENTIAL TRANSFORMATION THROUGH TOP² PROGRAM NEW LEVERS FOR AN ACCELERATED DEPLOYMENT OF HTTS HTTS DEVELOPMENT » INNOVATION €100M R&D BUDGET WITH SIEMENS » NEW DISTINCTIVE OFFERINGS REINFORCED DIFFER
Slide 10: Atos Origin launches today the project to create two subsidiaries
Executive Summary Atos Origin launches today the project* to create two subsidiaries Atos Origin ATOS Business Solutions Atos IT Services (HTTS, AtosWorldGrid, (MS, SI, CO) Medical BPO…) 2013 estimated **: Atos #1 European IT player Estimated Revenues ≈ €2 bn Estimated Revenues ≈ €7.5 bn Employees ≈
Slide 11: Indicative timeline of the transaction
Executive Summary Indicative timeline of the transaction » Call option agreement granted by Siemens to buy SIS, subject to: » Employee Work’s Council review » Antitrust clearance » Atos EGM » Expected closing of the transaction early July 2011 Dec. 2010 – Feb. 2011 Mid-April 2011 June 2011 early Jul
Slide 12: Agenda: B SIS: a re-shaped asset
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 13: Re-scoped perimeter of the transaction to limit risks
SIS: a re-shaped asset Re-scoped perimeter of the transaction to limit risks From Siemens SIS to SIS (Estimated FY2010 revenues, EURm*) 4,155 (485) 3,670 Siemens SIS De-scoping SIS Excluded from the scope of the transaction » De-scoped countries: Hungary, South Africa, Greece, Norway, Japan, Argenti
Slide 14: From Siemens SIS to SIS re-shaped
SIS: a re-shaped asset From Siemens SIS to SIS re-shaped SIS before and after carve-out in 2011**: FTE 2009, before carve- out and restructuring c. 34,200 (1,700) (4,400) » c. 34,200 FTE 28,100 (1,750) c. 26,350* At transaction closing, after carve- out and restructuring » c. 28,100 FTE, of which 7,
Slide 15: Geographical breakdown of SIS FTEs
SIS: a re-shaped asset Geographical breakdown of SIS FTEs FTEs expected at closing SIS # of FTE SIS footprint Nordics UK and 400 Russia Ireland 650 4,000 3,200 Other Central/ Other 1,900 Eastern Europe North 3,600 Western America Europe 7,500 India 2,350 Asia Pacific Germany 100 3,200 UAE Latin 1,20
Slide 16: A well-balanced business profile
SIS: a re-shaped asset A well-balanced business profile » Total estimated FY10e revenues*: €3.7bn under perimeter SIS SIS revenues by business SIS revenues by industry Energy & Consulting & Telecom & utilities Systems media 3 Integration 28 12 Manufacturing, Financial retail & services 15 42 transpo
Slide 17: Key areas of expertise
SIS: a re-shaped asset Key areas of expertise Service line Overview » Outsourcing delivered as standardised product » IT infrastructure services for Siemens and other customers Outsourcing » Very strong Managed Services footprint (Managed » Recognized in service desks, networking, desktop server, ap
Slide 18: SIS: a major player with strong IT capabilities
SIS: a re-shaped asset SIS: a major player with strong IT capabilities International Internal IT contract presence with Siemens Leading player in Reliable, diversified & German IT services SIS loyal customer base market Best-in-class IT Highly skilled outsourcing platform engineers » A global and po
Slide 19: Agenda: C Enhancement of Atos' growth and leadership profile
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 20: A very balanced geographical positioning for Atos and SIS
Enhancement of Atos' growth and leadership profile A very balanced geographical positioning for Atos and SIS Combined revenues of Atos and SIS by geography in 2010 (in €bn) Market share > 8% > 10% > 3% > 7% 1.9 1.6 1.4 1.4 Atos 0.2 1.1 SIS 0.5 1.4 0.4 0.7 1.0 1.6 1.2 0.9 0.1 0.3 0.5 0.5 0.1 0.3 0.1
Slide 21: Significant extension of geographic presence
Enhancement of Atos' growth and leadership profile Significant extension of geographic presence towards the most dynamic countries in Europe Atos and SIS combined » The combination with SIS provides a truly pan-European footprint 21 Atos - Analyst presentation - 15 December 2010
Slide 22: Geographical breakdown of the combined entity's 78,500 FTEs
Enhancement of Atos' growth and leadership profile Geographical breakdown of the combined entity’s 78,500 FTEs Combined entity # of staff Nordics Benelux 400 9,100 Germany UK and 11,600 Ireland 9,800 Central/ 5,900 Eastern Europe North 14,600 4,500 America France 800 Mediterranean countries Iberia 5
Slide 23: No customer overlap, value creating commercial fit
Enhancement of Atos' growth and leadership profile No customer overlap, value creating commercial fit Atos’ key customers SIS’s key customers Financial services Public sector and Health Energy & Utilities Manufacturing High tech & Telecom 23 Atos - Analyst presentation - 15 December 2010
Slide 24: New Company revenues by Business lines
Enhancement of Atos' growth and leadership profile New Company revenues by Business lines New Company revenues by business lines in 2010 (in €bn) Systems Integration Managed Services & Consulting c. €4.5 bn revenues c. €2.9 bn revenues 33% 52% 15% HTTS and other Specialised businesses c. €1.3 bn rev
Slide 25: Combined company in Managed Services global scale and capability sizing
Enhancement of Atos’ growth and leadership profile Combined company in Managed Services global scale and capability sizing ERP Applications x3 900,000 SAP users Data Centers x2 30 Main Data Centers X2.5 in MS >40,000 m² revenues Desktop x3.5 35,000 people 2,7 Million Seats 40 Million calls / year Ne
Slide 26: Scale matters in MS Business (1/2)
Enhancement of Atos' growth and leadership profile Scale matters in MS Business (1/2) Competitiveness levers » Top line enhancement: Revenue » Access to Request for Proposals on large deals currently out of reach growth » 2x Data Centers capacity to better address customer needs opportunity » More s
Slide 27: Scale matters in MS Business (2/2)
Enhancement of Atos' growth and leadership profile Scale matters in MS Business (2/2) Competitiveness levers » Higher scale enabling investments in production tooling automation Increased innovation capabilities » Better negotiating power on major software and hardware partners production tools part
Slide 28: SIS brings significant firepower in Systems Integration
Enhancement of Atos' growth and leadership profile SIS brings significant firepower in Systems Integration Significantly » 7,000 additional professionals including 2,500 in New Co in SI increase footprint off shore and near shore locations of SI and » Critical mass in several key geographies • 30,00
Slide 29: An accelerator of HTTS development strategy
Enhancement of Atos' growth and leadership profile An accelerator of HTTS development strategy Current levers of HTTS growth » Organic growth at Atos Worldline » Atos Worldline roll-out on new geographies and clients » Targeted acquisitions Additional levers Additional firepower for acquisitions » E
Slide 30: The pillars of the growth strategy for New Company
Enhancement of Atos' growth and leadership profile The pillars of the growth strategy for New Company Reinforced Global Multiple HTTS Investments for leadership in partnership revenue development growth MS and SI with Siemens synergies » Unique » Strategic » Leverage to » MS/ SI Mega » Dedicated lea
Slide 31: Agenda: D Global partnership with Siemens
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 32: A strong Global Partnership
Global partnership with Siemens A strong Global Partnership The basis of the partnership with Siemens… Convertible Bond to Long term IT 15% stake in Atos share the results Membership at Atos services contract capital, with a 5-year from expected Board of Directors with Atos lock up synergies (€5.5 b
Slide 33: Siemens as a new Atos customer: a 7-year IT services contract
Global partnership with Siemens Siemens as a new Atos customer: a 7-year IT services contract Terms and scope of the contracts agreed with Siemens » IT contracts agreed with Siemens on Managed Services and Systems Integration Scope » Services related to IT infrastructure and applications » 7 years (
Slide 34: Global Alliance Agreement: ambition to generate joint recurring revenues
Global partnership with Siemens Global Alliance Agreement: ambition to generate significant joint additional recurring revenues Integration in Siemens Commercial partnerships Joint investments HTTS One » Commercial partnerships » Integration of Atos into » Funding of the » Cross-sector cooperation i
Slide 35: Partnership concluded in sectors where Siemens has leading positions
Global partnership with Siemens Partnership concluded in sectors on which Siemens has obvious worldwide leading positions Healthcare Industrials and tools Transportation » Full proprietary solution » Strong relationship in » Key references in the Atos based on software as a Automotive and Transporta
Slide 36: A joint 3-year €100 m R&D plan to strengthen innovation
Global partnership with Siemens A joint 3-year €100 m R&D plan (split 50-50) to strengthen innovation » Rationale of the joint investment plan » Development of new products » Commercial launch » €50 m investments each » A joint committee to evaluate projects and decide on funding allocation » 10 pot
Slide 37: Agenda: E Turnaround potential: TOP² program and synergies
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial Synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 38: The drivers of the turnaround plan
Turnaround potential: TOP² program and substantial Synergies The drivers of the turnaround plan Further to the restructuring plan of 1,750 staff announced today, €225 m estimated additional EBIT by 2013, via a turnaround plan built on a combination of: 1 Application of TOP² program to 2 Combination
Slide 39: Application of TOP² program at SIS level
Turnaround potential: TOP² program and substantial Synergies Application of TOP² program at SIS level 1 The 4 key levers of TOP² program Impact on 2013e EBIT Description Streamline » G&A functions optimization in order to reach Atos G&A functions standards Sales function » Admin-to-sales ratio optim
Slide 40: Combination synergies on costs
Turnaround potential: TOP² program and substantial Synergies Combination synergies on costs 2 The 3 sources of costs synergies Impact on 2013e EBIT Description Procurement » Benefit from doubling of purchasing amounts and indirect to get discount costs Combine level » Ensure appropriate span of cont
Slide 41: Agenda: F Transaction designed to increase short term value
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 42: Financial strength secured by downward protections granted by Siemens
Transaction designed to increase short term value for our shareholders A transaction enabling to secure financial strength of New Company thanks to agreed downward protections granted by Siemens Transaction add-ons on SIS » Fully funded pensions for the 28,100 SIS employees: €1 billion » A joint res
Slide 43: A deal protective for Atos cash and financing structure
Transaction designed to increase short term value for our shareholders A deal protective for Atos cash and financing structure » Very significant carve-out and restructuring process entirely financed by Siemens and completed prior transfer to Atos » SIS balance sheet fully funded and working capital
Slide 44: Transaction structure
Transaction designed to increase short term value for our shareholders Transaction structure Amount Structure Comments » €600 m » 12.5 million » Based on last 6 month average stock shares (15% of price Atos future » Long term commitment of Siemens to capital) realise successful integration of SIS »
Slide 45: New Company leverage potential
Transaction designed to increase short term value for our shareholders New Company leverage potential Net debt* and leverage* From today… …to 2013 €140 m Positive cash » Financial debt (at 31.12.2010) position » Leverage potential €1.2 bn c. €2.5 bn * Estimated Zero debt expected end of 2012 (before
Slide 46: Significant value creation potential
Transaction designed to increase short term value for our shareholders Significant value creation potential Objectives for New Company Background and context Key assumptions » No major change in market » SIS fiscal year until 2010: conditions » 1st October to 30 September » 2011e combined figures ca
Slide 47: Agenda: G Strategy and objectives
Agenda A Executive summary B SIS: a re-shaped asset C Enhancement of Atos' growth and leadership profile D Global partnership with Siemens E Turnaround potential: TOP² program and substantial synergies F Transaction designed to increase short term value for our shareholders G Strategy and objectives
Slide 48: A booster to the Atos strategy
Strategy and objectives A booster to the Atos strategy 2011 2012 2013 Deliver on TOP² program GROUP INTEGRATION and synergies to increase combined profitability Reinforce leading player BOOST ATOS AMBITION IN HTTS, WITH A FOCUS position in electronic IN PAYMENT SYSTEMS payment systems ACCELERATE DIF
Slide 49: Significant value creation potential
Strategy and objectives Significant value creation potential Objectives for the New Company 2011 2013 » Revenues » Revenues » Evolution expected at IT market » Between €9 billion and €10 billion growth » Operating margin » Operating margin » Between 7% and 8% » Around 6% » EPS » EPS » Growth in exce
Slide 50: Appendix
Agenda Appendix 50 Atos - Analyst presentation - 15 December 2010
Slide 51: Additional strengths in verticals
Appendix Additional strengths in verticals Combined New Company revenues by verticals (in €bn) Market share >2% >2% >1.5% >1.5% >3% (worldwide) 2.9 SIS 2.4 Atos 1.8 1.6 1.0 0.6 1.1 0.6 0.4 0.1 1.3 1.4 1.2 0.7 0.5 Manufac- Public Sector Financial Telecom Media Energy & turing & & Health Services Util
Slide 52: Examples of specialised offers cross selling in Systems Integration
Appendix Examples of specialised offers cross selling in Systems Integration Atos SIS » Enterprise Content Management » Testing & Acceptance Management » Identity & Security Risk Management – IT Security » Nuclear I&C » Smart Metering – Energy Solutions » Telecom Billing » Next Generation Internet N
Slide 53: SIS existing transactions-based assets
Appendix SIS existing transactions-based assets » Type of contracts » Intellectual property owned by SIS » Transactions-based revenue model Atos HTTS corresponding Examples of SIS businesses businesses » UK government bonds managing » Trading platform platform » UK public sector: vehicles licensing