Atos Se · EURONEXT:ATO
Atos — FY2017 Earnings Presentation
53 slides from Atos's earnings presentation, Feb 21, 2018
Slide 1: FY 2017 results
FY 2017 results Bezons February 21, 2018
Slide 2: Disclaimer
Disclaimer ▶ This document contains forward-looking statements that involve risks and uncertainties, including references, concerning the Group's expected growth and profitability in the future which may significantly impact the expected performance indicated in the forward-looking statements. These
Slide 3: Agenda
Agenda 1.2017 key figures, strategy and objectives for 2018 2.Financial performance 3.Commercial activities: focus on digital 4.Follow-up on operations and transformation programs 5.Conclusion and Q&A 3 | Atos – FY 2017 results
Slide 4: 2017 key figures, strategy and objectives for 2018
2017 key figures, strategy and objectives for 2018 Thierry Breton Chairman & CEO
Slide 5: 2017 key figures (1/2)
2017 key figures (1/2) A very strong set of results Revenue Growth at constant FX Organic growth €12.7bn +10.1% +2.3% Operating margin Operating margin rate* Book to bill €1,292m 10.0% 110% +18% at constant scope +140bps at constant scope 123% in Q4 and exchange rates and exchange rates 5 | Atos – F
Slide 6: 2017 key figures (2/2)
2017 key figures (2/2) A very strong set of results Net income Group share Basic Earnings Per Share Total number of employees €601m €5.72 97,267 +11% vs. 2016* +9% vs. 2016* -3% year-on-year Free cash flow OM conversion to FCF** Net cash position €714m 56.5% €307m +25% year-on-year vs. 50.8% in 2016
Slide 7: 2017 highlights
2017 highlights Large end-to-end signatures to power the digital transformation of Atos clients Digital Transformation Factory now representing 23% of Group revenue, driving the growth of Atos digital businesses Atos technology leap further accelerated Pursuing selective acquisition strategy to rein
Slide 8: 2017: Highest CSR Global Awards from leading independent agencies
2017: Once again Atos received the highest CSR Global Awards from leading independent external agencies Global CSR Awards 2017: DJSI World & Europe - DJSI World & Europe - GRI - Ecovadis; - CDP… People Business & Innovation Ethics & Procurement Environment 8 | Atos – FY 2017 results
Slide 9: For Atos customers, 2017 was the year of digital buy-in
For Atos customers, 2017 was the year of digital buy-in Atos Digital Transformation Factory (as a % of total Group revenue) c. 40% Atos Digital businesses 23% 13% Digital Transformation Factory 23% 2016 2017 2018e 2019e 9 | Atos – FY 2017 results
Slide 10: Cloudification: End-to-end Transformation
For Atos customers, 2017 was the year of digital buy-in Cloudification Atos Application Consulting Application Transformation End-to-end Transformation End-to-end Cybersecurity >€1.1bn Legacy Apps revenue in 2017 Digital Apps • Cost End-to-end IT Service Management & Orchestration • Quality Data- •
Slide 11: Cybersecurity & GDPR compliance
For Atos customers, 2017 was the year of digital buy-in Cybersecurity & GDPR compliance Increased awareness Explosion of Cybercrime & demand acceleration 3 million >8 million endpoints IoT devices secured managed 100 million 1.4 million Atos Prescriptive Security security events unique IPs Operation
Slide 12: Workplace digitization
For Atos customers, 2017 was the year of digital buy-in Workplace digitization Reinforced leadership Investments in digital offerings portfolio €0.8bn Leverage Unify digital technologies Digital Workplace Increased win rate revenue Deploying consumer experience in enterprises €0.2bn Strengthened rec
Slide 13: Artificial Intelligence
For Atos customers, 2017 was the year of digital buy-in Artificial Intelligence Our solutions already embedding AI delivering the best business outcomes to our clients Sequana Bullion Quantum Trust, Deep High intimacy, & Data knowledge learning Performance lakes of clients algorithms Computing chall
Slide 14: For Atos customers, 2018-19 will be the years of digital dividends
For Atos customers, 2018-19 will be the years of digital dividends Cybersecurity 2 Cloudification 1 & GDPR . compliance . 4 3 . Workplace digitization Artificial Intelligence 14 | Atos – FY 2017 results
Slide 15: Digital skilling and competence building
2018-2019: delivering Digital dividends Digital skilling and competence building Digital graduates from world leading universities 1,100 x3 in 2017 2017 vs. 2016 Digital certifications x 2.5 16,000 2017 vs. new employees 2016 digital certified Digital R&D experts + 1,500 in 2017 15 | Atos – FY 2017
Slide 16: Digital dividends – Partnerships
For Atos customers, 2018-19 will be the years of digital dividends – Partnerships Cloud orchestration Robotics Artificial intelligence Cognitive Exascale computing Analytics 16 | Atos – FY 2017 results
Slide 17: Stronger top management team & enhanced operational governance
2018-2019: delivering Digital dividends Stronger top management team & enhanced operational governance Group General Management Committee Executive Committee appointments Gilles Grapinet Eric Grall Elie Girard Ursula Morgenstern Global Global Chief CEO Germany* Functions Operations Financial & World
Slide 18: Significant improvements in 2018 comforting 2019 Ambition
Significant improvements in 2018 comforting 2019 Ambition Post IFRS 15 2018 objectives 2019 Ambition Revenue +2% to +3% +2% to +3% organic growth 2017-2019 CAGR Operating 10.5% to 11% c. 11.5% margin of revenue of revenue Free cash flow c. 60% c. 65% of operating margin of operating margin 18 | Atos
Slide 19: Operational performance
Operational performance Elie Girard Group CFO
Slide 20: Constant scope and exchange rates figures reconciliation
Constant scope and exchange rates figures reconciliation 2016 2016 In € million 2017 % change % change Restated Reported Statutory revenue 12,691 12,138 +4.6% 11,717 +8.3% Exchange rates effect -188 -187 Revenue at constant exchange rates 12,691 11,950 +6.2% 11,530 +10.1% Scope effect 467 887 Exchan
Slide 21: 2017 performance by Division
2017 performance by Division ▶ Each Division generated positive growth every quarter ▶ Atos Digital Transformation Factory successfully achieved 23% of Group revenue ▶ Operating margin achieved 10.0% improving by +140 bps excluding pension one-offs Revenue Operating margin Operating m argin % Organi
Slide 22: Infrastructure & Data Management
Infrastructure & Data Management North America ▶ Revenue growth fully in line with 3-year plan 14% 29% Germany ▶ Acceleration of the transition to hybrid cloud and 7% UCC integration led to profitability improvement United Kingdom & Ireland 9% Benelux & The Nordics ▶ -5% staff reduction at 45,678 fr
Slide 23: Business & Platform Solutions
Business & Platform Solutions ▶ Continuous top line improvement France 26% ▶ Growth led by Codex and SAP HANA take-off 32% Germany ▶ Strong margin increase thanks to RISE program Benelux & The Nordics (Application Management Industrialization) United Kingdom & Ireland 10% 19% ▶ -4% staff reduction a
Slide 24: Big Data & Cybersecurity
Big Data & Cybersecurity ▶ Double digit revenue growth led by the demand for Cybersecurity solutions and High 24% France Performance Computing Germany ▶ Further investments to extend the Division 48% North America 7% markets both in terms of industries and United Kingdom & Ireland geographies 9% 10%
Slide 25: Worldline
Worldline ▶ Solid organic growth with H2 at +6.4% France 20% 25% ▶ Reinforcement of offers to support key Belgium payment market trends Germany 6% ▶ Fast integration of acquisitions contributing to The Netherlands margin improvement 12% 23% The United Kingdom 13% ▶ Direct staff at 8,682, +7% increas
Slide 26: 2017 performance by Business Unit
2017 performance by Business Unit ▶ Positive growth in almost all Business Units ▶ Strong operating margin improvement in most of the geographies Revenue Operating margin Operating m argin % Organic 2017 2016* 2017 2016* 2017 2016* In € million evolution Germany 2,251 2,215 +1.6% 190 172 8.5% 7.8% N
Slide 27: 2017 headcount evolution
2017 headcount evolution +12,693 -11,588 +1,069 -5,003 100,096 97,267 Headcount as Scope Hiring Leavers Restructuring Headcount as of 31/12/16 & dismissals of 31/12/17 27 | Atos – FY 2017 results
Slide 28: Cash flow statement
Cash flow statement Free cash flow Free cash flow / Operating margin In € million 2017 2016 Operating margin 1,292 1,122 714 as a % of revenue 10.2% 9.2% OMDA 1,608 1,374 as a % of revenue 12.7% 11.3% 569 Capital Expenditures -526 -456 Change in working capital requirement -25 -8 56.5% Cash from ope
Slide 29: Net cash evolution
Net cash evolution -403 +38 +714 -168 -59 -144 329 307 Net cash Free Acquisitions Capital Dividend Share FX rate Net cash 31/12/16 cash increase paid buy-back fluctuation 31/12/17 flow effect 29 | Atos – FY 2017 results
Slide 30: Income statement
Income statement In € million 2017 2016 Revenue 12,691 12,138 Operating margin 1,292 1,122 % of revenue 10.2% 9.2% Reorganization, Rationalisation, Integration & acquisition costs -163 -164 Amortization of intangible assets (PPA from acquisitions) -109 -106 Equity based compensation -86 -50 Visa Sha
Slide 31: Net Income and EPS Group share evolution
Net Income and EPS Group share evolution Net income Group share Normalized Basic EPS Group share (in € per share) Visa share Normalized Diluted EPS Group share (in € per share) 8.24 8.21 601 579 36 7.54 7.51 2016 2017 2016 2017 31 | Atos – FY 2017 results
Slide 32: Simplified balance sheet
Simplified balance sheet 31 December 2016 31 December 2017 € 13.4 billion € 13.5 billion ▶ Shareholders Goodwill: Shareholders’ Goodwill: equity +8% Shareholders’ 4.18 4.38 equity: 4.84 equity: 5.23 ▶ Net pension provision Non-current Other non-current Non-current Other non-current decreasing by ass
Slide 33: 2017 to 2018 operating margin: forecasted evolution
2017 to 2018 operating margin: forecasted evolution 10.5% to 11% +5bps +15bps +20bps +10bps -20 bps +50bps -10bps -10bps 10.2% 10.3% 10.0% 2017 Pension 2017 12 month FX effect IFRS 15 2017 IDM B&PS BDS Worldline 2018e one-offs excl. scope as of pro forma pension effect end of one-offs Dec 2017 33 |
Slide 34: 2017 to 2018 free cash flow: forecasted evolution
2017 to 2018 free cash flow: forecasted evolution +10 +10 +10 +15 -25 +70 +5 c. 60% OM conversion 714 to FCF 56.5% OM conversion to FCF 2017 Additional Operating Net release Capex Reorganisation, Tax Others 2018e FCF from margin of net of Rationalization 2017 improvement provisions depreciations & I
Slide 35: Commercial activities: focus on digital
Commercial activities: focus on digital Patrick Adiba
Slide 36: 2017 Commercial activity dashboard
2017 Commercial activity dashboard Order entry Book to bill ratio €13.9bn 110% +6.9% year-on-year 123% in Q4 Backlog Qualified pipeline €22.7bn €7.4bn 1.8 years of revenue 7.0 months of revenue 36 | Atos – FY 2017 results
Slide 37: Results of the focus on top accounts
Results of the focus on top accounts Top accounts: 200 Atos’ largest clients 63% +4% of Atos revenue Top 200 accounts revenue growth 53% +20% 54% Win rate Number of of Cross-selling +5 points year-on-year clients>€50m 3 divisions at least, <90% for the lead one 37 | Atos – FY 2017 results
Slide 38: Digital Transformation Factory
Digital Transformation Factory Atos Digital Transformation Factory some Q4 signatures (as a % of total Group revenue) Canopy Orchestrated Hybrid Cloud SAP HANA Atos Digital Workplace c.40% CODEX 23% 6% 13% 7% 4% 2% 2% 1% 9% European multinational 6% luxury conglomerate 2016 2017 2018e 2019e 38 | Ato
Slide 39: Atos Canopy Orchestrated Hybrid Cloud
Atos Canopy Orchestrated Hybrid Cloud Transforming datacenter operations into flexible cloud solutions Worldwide leader in • Secure and stable Data Center Services leveraging adhesive technologies, newest and proven cloud technologies beauty care, laundry and • Shared private cloud to run and manage
Slide 40: Earth Observation Services
Earth Observation Services Atos Codex innovation to create a new business platform New eco-system to deliver digital services from Earth Observation data A driver for disruptive new services and business models for our customers Platform and toolbox to create new use cases for all markets Agricultur
Slide 41: Airports of Thailand
Airports of Thailand SAP S/4HANA rollout in 6 airports Challenges Solution Benefits An overwhelming air SAP S/4HANA to Modernization of AOT traffic growth support its vision business Be the world’s smartest Complimentary Improved user and airport solutions customer experience Real time access to ana
Slide 42: European multinational luxury conglomerate
European multinational luxury conglomerate GDPR compliance as part of a Large Big Data project Challenges Solution Benefits Broad scope Data protection Improved security Data lake project including 3 readiness awareness Azure platforms worldwide Global business approach to rightfully collect, proces
Slide 43: 2018 in North America: action plan on top line
2018 in North America: action plan on top line Growth levers Actions • For each top account: one sale executive + one delivery executive Sales organization • 2 different sales roles and approach: Large deals hunting / Cross-selling & fertilization Industrialization of • Dedicated Head and team for l
Slide 44: Transformation TOP Program
Transformation TOP Program Eric Grall Head of Global Operations
Slide 45: A fully secured trajectory to deliver our Operating Margin commitment
2017–2018: A fully secured trajectory to deliver our Operating Margin commitment Continuous improvement TOP programs Volume 10.5% Other TOP Execution mix actions New TOP Risk to Programs 11% RISE Product- 10.3% ivity, Workforce Lean, Salary E2E Mgmt Price Real Erosion Procur- Estate New TOP programs
Slide 46: Industrialization of B&PS Application Services (RISE Program)
Industrialization of B&PS Application Services (RISE Program) 2017-2018 Key Strategic Objectives a Industrialization and Cost Pyramid Account Transformation; India-led Delivery b Automation Integrated delivery tools & methods through our platform c Offshoring Implementation/Roll out of B&PS Pr
Slide 47: Focus on new TOP initiatives – SG&A Functions Transformation
Focus on new TOP initiatives – SG&A Functions Transformation Robotized Process More online and Digital tools to Automation for self-service tools increase our our functions performance eg., Rationalization eg. Self-service eg. Rollout of reports production Salesforce of admin. and completed transact
Slide 48: Automation Update in Infrastructure & Data Management
Automation Update in Infrastructure & Data Management H2 Automation Automation Catalog Account Coverage (BOTS deployed) 263 From 340 BOTS in H1 +142 vs H1 to 717 BOTS in H2 + 111 % Current Average Account with Highest Automation DC Automation Achieved Achieved to Date (post full deployment) (post fu
Slide 49: Automation update in Business & Platform Solutions and Big Data & Cybersecurity
Automation update in Business & Platform Solutions and Big Data & Cybersecurity Business & Platform Big Data & Cybersecurity Solutions From 2,000+ in 2017 Prescriptive SOC to 3,500 BOTS 70%+ Automation on incoming end of H1 2018 security incidents Business & Platform Big Data & Cybersecurity Solutio
Slide 50: Conclusion and Q&A
Conclusion and Q&A Thierry Breton Chairman & CEO
Slide 51: 2018 priorities
2018 priorities Accelerating digital Rolling-out transformation businesses Artificial Intelligence supported by digital skilling & in all our offerings competence building Deploying the new TOP Pursuing selective acquisition transformation programs to strategy, fully supporting deliver operational p
Slide 52: Q&A
Slide 53: Thanks
Thanks Atos, the Atos logo, Atos Codex, Atos Consulting, Atos Worldgrid, Worldline, BlueKiwi, Bull, Canopy the Open Cloud Company, Unify, Yunano, Zero Email, Zero Email Certified and The Zero Email Company are registered trademarks of the Atos group. April 2016. © 2016 Atos. Confidential information