Atos SE · EURONEXT:ATO
Atos — Atos Origin — H1 2010 Earnings Presentation
52 slides from Atos's earnings presentation, Jul 28, 2010
Slide 1: Atos Origin First half 2010 results
Atos Origin First half 2010 results Management Conference call Paris, 28 July 2010 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, Atos Worldline, Atos Sphere, Atos Cloud and Atos WorldGrid and the fish itself are registered trademarks of Atos Origin SA. June 2010 © 2010 At
Slide 2: Disclaimers
Disclaimers » This presentation contains further forward-looking statements that involve risks and uncertainties concerning the Group’s expected growth and profitability for 2010. Actual events or results may differ from those described in this presentation due to a number of risks and uncertainties
Slide 3: H1 2010 – Highlights
H1 2010 – Highlights H1 results in line with annual objectives » Revenue: EUR 2,494 million, a - 4.6% organic decrease (-3.5% excluding Arcandor) » Operating Margin: With the new French business tax recorded in Income Tax, EUR 150 million representing 6.0 per cent of revenue EUR 141 million at 5.7%
Slide 4: H1 2010 – Financial Highlights and KPI's
H1 2010 – Financial Highlights and KPI's (*) Proforma figures: Constant scope and FX rates Commercial activity: Revenue H1 2010 revenue with a 2,615 2,494 limited organic 114% 112% -4.6% org. variation Book-to- Bill Ratio slightly up 2009 (*) 2010 (M€) H1 2009 H1 2010 Net debt Operating Margin Dec 0
Slide 5: Agenda
Agenda » H1 2010 Business overview » H1 2010 Performance » Dynamics of the strategy » 2010 Outlook 5 Atos Origin H1 2010 results / 28 July 2010
Slide 6: Some customers' contracts won in Q2 2010
Some customers’ contracts won in Q2 2010 » In France Service Customers Line Deals Dalkia MS New contract: to host, manage, transform and optimize the customer IT Payroll Outsourcing Renewal: Network and servers administration & housing for payroll MS company management New signature: Build and roll-
Slide 7: Some customers' contracts won in Q2 2010
Some customers’ contracts won in Q2 2010 » In the UK Customers Service Line Deals UK Ministries BPO New signature – Installed base migration New signature – Enable the customer to reduce the costs of IT Northern Foods SI operations New signature – IT hosting services for SAP, Siebel for back office
Slide 8: Commercial Activity
Commercial Activity » Total order entry reached EUR 2,844 billion, representing a book to bill ratio at 114%, slightly above first half 2009 Systems Managed Book to Bill Total Group Consulting HTTS Integration Services H1 2010 114% 125% 121% 102% 129% Q2 2010 100% 116% 111% 77% 123% Q1 2010 128% 133
Slide 9: Agenda
Agenda » H1 2010 Business overview » H1 2010 Performance » Dynamics of the strategy » 2010 Outlook 9 Atos Origin H1 2010 results / 28 July 2010
Slide 10: H1 2010 revenue at -4.6 per cent organic decline
H1 2010 revenue at - 4.6 per cent organic decline In Eur Million H1 2010 H1 2009 ∆% Revenue 2,494 2,589 -3.7% Exchange rates impact 26 Revenue at constant scope and exchange rates 2,494 2,615 -4.6% 10 Atos Origin H1 2010 results / 28 July 2010
Slide 11: Quarterly revenue evolution
Quarterly revenue evolution (*) (*) Figures at constant scope and exchange rates Consulting, Systems Integration Managed Services, HTTS, Medical BPO (in EUR Million) 787 791 740 762 756 726 562 537 526 505 507 474 Q1-09 CS Q2-09 CS Q3-09 CS Q4-09 CS Q1-10 Q2-10 Q1-09 CS Q2-09 CS Q3-09 CS Q4-09 CS Q1
Slide 12: H1 2010 Performance by Service Line
H1 2010 Performance by Service Line Revenue Operating Margin Operating Margin % H1 2009 % organic H1 2009 H1 2009 In Eur Million H1 2010 H1 2010 H1 2010 proforma growth proforma proforma Managed Services 903 963 -6.2% 63.3 33.2 7.0% 3.4% Systems Integration 902 955 -5.6% 33.2 37.7 3.7% 3.9% HTTS 499
Slide 13: Managed Services
Managed Services H1 2009 In Eur Million H1 2010 % Organic proforma Revenue 903 963 -6.2% Operating margin 63.3 33.2 +91% Operating margin rate 7.0% 3.4% +356 bp Headcount Jun-10 Dec-09 Change (%) At end of the month 16,131 16,305 -1% Others 12% Ger/ CEMA Benelux 13% 29% UK France 21% 25% 13 Atos Ori
Slide 14: Systems Integration
Systems Integration H1 2009 In Eur Million H1 2010 % Organic proforma Revenue 902 955 -5.6% Operating margin 33.2 37.7 -12% Operating margin rate 3.7% 3.9% -26 bp Headcount Jun-10 Dec-09 Change (%) At end of the month 21,949 22,647 -3% Utilization rate evolution by semester Spain Others 12% 9% H1 20
Slide 15: Hi-Tech Transactional Services
Hi-Tech Transactional Services H1 2009 In Eur Million H1 2010 % Organic proforma Revenue 499 488 +2.2% Operating margin 79.6 71.8 +11% Operating margin rate 15.9% 14.7% +123 bp Headcount Jun-10 Dec-09 Change (%) At end of the month 5,896 5,771 +2% Atos WL 84% Others 1% Spain 3% Asia UK 4% 8% 15 Atos
Slide 16: Consulting
Consulting H1 2009 In Eur Million H1 2010 % Organic proforma Revenue 110 132 -17.0% Operating margin -3.1 1.6 -293% Operating margin rate -2.8% 1.2% -398 bp Headcount Jun-10 Dec-09 Change (%) At end of the month 1,919 2,070 -7% APAC Utilization rate evolution by semester 1% H1 2009 H2 2009 H1 2010 S
Slide 17: Medical BPO
Medical BPO H1 2009 In Eur Million H1 2010 % Organic proforma Revenue 80 76 +5.1% Operating margin 8.4 8.6 -2% Operating margin rate 10.6% 11.3% -74 bp Headcount Jun-10 Dec-09 Change (%) At end of the month 1,931 1,879 +3% UK 100% 17 Atos Origin H1 2010 results / 28 July 2010
Slide 18: H1 2010 Performance by Global Business Unit
H1 2010 Performance by Global Business Unit Revenue Operating Margin Operating Margin % H1 2009 % organic H1 2009 H1 2009 In € Million H1 2010 H1 2010 H1 2010 proforma growth proforma proforma France 573 573 +0.1% 17.6 22.1 3.1% 3.9% Benelux 459 517 -11.2% 42.8 34.4 9.3% 6.7% United Kingdom 442 458
Slide 19: Headcount evolution
Headcount evolution » Decrease of direct staff to stick to the evolution of activity » Decrease in indirect staff as an effect of restructuring to reduce cost base (TOP program) » Hiring: +2,500 new employees 49,036 (2,146) 48,188 +2,487 (1,189) Staff as at 31 Leavers Lay-offs & Hirings Staff as at
Slide 20: Attrition rate by Service Line
Attrition rate by Service Line » Stable level at Group level » Attrition in consulting is traditionally higher than for other activities 16,5% 9,9% 10,8% 10,0% 8,6% 8,0% 8,8% 7,5% 7,4% 7,0% 6,4% 5,8% June 09 Dec 09 June 10 Consulting Systems Integration Managed Services Group 20 Atos Origin H1 2010
Slide 21: Staff by Global Business Unit
Staff by Global Business Unit Closing Closing (in units) Change since opening Jun 2010 Dec 2009 France 11,583 11,954 (371) -3.1% Benelux 7,230 7,750 (520) -6.7% United Kingdom 6,399 6,269 +130 +2.1% Atos Worldline 4,817 4,804 +13 +0.3% Germany/ CEMA 3,628 3,746 (118) -3.2% Spain 5,527 5,668 (141) -2
Slide 22: Evolution of headcount since January 2008
Evolution of headcount since January 2008 » Direct staff stabilized since April 45,370 44,196 43,941 43,522 Dec-08 Jun-09 Dec-09 Jun-10 » Indirect staff decrease 5,605 5,211 5,094 - 8.4% 4,666 Dec-08 Jun-09 Dec-09 Jun-10 22 Atos Origin H1 2010 results / 28 July 2010
Slide 23: Workforce management
Workforce management » Bench reduction is always a priority for Atos Origin 1,565 1600 1,044 Reduction by - 210 over the 1400 last 12 months 1200 834 1000 749 800 Dec-08 Jun-09 Dec-09 Jun-10 » External subcontractors level stabilized - level below 5% of total headcount 3,560 3500 3000 2, 517 2, 433
Slide 24: Offshore staff as of 30 June 2010
Offshore staff as of 30 June 2010 » Offshore recruitments: More than half of Group recruitments were made in offshore countries 884 hiring in the second quarter versus 478 in the first quarter » Overall: +435 staff increase in 6 months compares to +518 in 12 months last year » Staff in India: from 8
Slide 25: Income statement
Income statement (In EUR Millions) H1 2010 H1 2009 Revenue 2,494 2,589 Operating Margin 150 118 % revenue 6.0% 4.6% Restructuring and rationalization (30) (75) Capital gains on disposal of assets (2) (2) Impairment losses and others (23) 1 Operating income 96 43 % revenue 3.8% 1.6% Net financial exp
Slide 26: Balance sheet
Balance sheet 30 June 31 Dec 30 June 31 Dec In € Million In € Million 2010 2009 2010 2009 Goodwill 1,556 1,508 Shareholders Equity 1,621 1,551 Equity of minority interests 4 11 Intangible assets 77 69 Tangible assets 395 407 Total Equity 1,625 1,562 Non-current financial assets and instruments 148 2
Slide 27: Operating cash flow evolution
Operating cash flow evolution H1 2008 H1 2009 H1 2010 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 09 (in M€) (119) (139) - 54 +74 +74 Acquisitions (304) (328) (338) -24 -24 Net debt position as of 30 June: -149 -149 (119) million (487) -27 relating to Italy and UK pensions (514) -x -x Operating cash flow
Slide 28: Cash flow statement
Cash flow statement (In EUR Million) H1 2010 H1 2009 OMDA (*) 240 215 Net capital Expenditures (73) (107) Change in working capital 1 (38) Cash from Operations 169 70 Taxes paid (27) (11) Net costs of financial debt paid (3) (6) Net interest of convertible bonds (6) Reorganisation (47) (62) Rational
Slide 29: Agenda
Agenda » H1 2010 Business overview » H1 2010 Performance » Dynamics of the strategy » 2010 Outlook 29 Atos Origin H1 2010 results / 28 July 2010
Slide 30: Dynamics of the strategy
Dynamics of the strategy 2009 2010 2011 2012 2013 Operating Margin GROUP Objective: 7 to 8%, catching TRANSFORMATION up with competitors Objective: DEPLOYMENT OF HTTS, ENGINE OF X2 GROUP DEVELOPMENT Organically •INNOVATION •NEW DISTINCTIVE OFFERINGS •TOPLINE GROWTH / CONSOLIDATE MARKET POSITIONING »
Slide 31: TOP, a dynamic transformation program
TOP, a dynamic transformation program: 30 global initiatives within the Group 5. Well Being At Work » Seven projects to attract and retain Talents 2010 2010 1. Cost optimization and cash management » to reach an Operating 2010 Margin at the level of 2010 4. TOP Sales best performers » Five projects
Slide 32: Non personal cost base reduction
Non personal cost base reduction » Main items have been: » Maintenance costs: decreased by -17% » Cars related expense: decreased by -17% » Over H2 2010, still room for Telecom savings -17% -17% 131.5 -5% -5% 108.6 105.6 100.1 -40% -40% 78.5 -17% -17% 62.1 56.4 57.6 55.0 47.1 47.5 39.3 39.2 35.6 Tra
Slide 33: Personal costs comparison versus H1 2009
Personal costs comparison versus H1 2009 Revenue proforma change Direct personal costs (in M€) (in M€) 2,615 2,494 -4.6% org. 302 263 -4.8% org. 1,253 1,217 subcontractors Direct staff 2009 (*) 2010 (M€) 2009 2010 Indirect personal costs (in M€) 233 -6.4% org. 218 2009 2010 33 Atos Origin H1 2010 re
Slide 34: Lean management: a key contributor to competitive gains
Lean management: a key contributor to competitive gains » Number of AO Lean experts deployed 220 170 150 130 Dec 09 Jun 10 e Dec 10 e Dec 11 e >16 000 » Cumulated direct staff working under Lean management 9 000 4 900 2 800 15 per cent productivity gain expected, and material Delivery Quality increa
Slide 35: TOP Sales initiatives to return to growth in 2011
5 TOP Sales initiatives to return to growth in 2011 Top Sales 1 - Sales Training 1 4 Top Sales 4 Pipe Marketing 2 5 Top Sales 2 Top Sales 5 Growth X Account Professional planning Services Sales 3 Top Sales 3 Win rate Bid Management 35 Atos Origin H1 2010 results / 28 July 2010
Slide 36: H1 achievements and H2 next steps
H1 achievements and H2 next steps H1 achievements H2 next steps Top Sales 1 • 3,000 days of sales training have been • Complete training of 1,700 sales Sales Training delivered and sales support staff Top Sales 2 • Account planning methodology defined • Implement identified sales and roll-out to mos
Slide 37: Well Being at Work - first achievements
Well Being at Work - first achievements Atos AtosCampus Campusis iscertified certifiedby bythe the highest highestenvironment environmentstandards standards Atos AtosCampus Campus Identity Identity Bezons showcase: the new Atos Campus! 1st 1stCorporate Corporate Responsibility UN UNGlobal Global Res
Slide 38: Dynamics of the strategy
Dynamics of the strategy 2009 2010 2011 2012 2013 Operating Margin GROUP Objective: 7 to 8%, catching TRANSFORMATION up with competitors Objective: DEPLOYMENT OF HTTS, ENGINE OF X2 GROUP DEVELOPMENT Organically •INNOVATION •NEW DISTINCTIVE OFFERINGS •TOPLINE GROWTH / CONSOLIDATE MARKET POSITIONING »
Slide 39: The HTTS Roadmap since June 2009
The HTTS Roadmap since June 2009 • 12 June 2009 - Investor Day in Brussels: Launch of HTTS Strategic Development Initiative • Set-up of Teams, structuring the initiative, H2 2009 first country trainings and customer contacts • Go-to-market testing, lead and H1 2010 opportunity generation, first larg
Slide 40: HTTS status after months of live business
Status after 6 months of live HTTS 70 5 Staff dedicated to Business Geographies Development with structured teams 600+ Sales People 50 1,300+ trained Staff active on Top Managers having HTTS outside of a HTTS incentive Atos Worldline EUR 350 - 400 million Full unweighted 10+ HTTS Pipeline 70 Leads g
Slide 41: A sustained portfolio of HTTS leads and opportunities
A sustained portfolio of HTTS leads and opportunities identified in all geographies Spain » IVR Systems, » Urban Mobility Applications » Loyalty Programs » Fraud Management » Messaging services » M2M UK » Supply Chain Financing » Mobile Applications » IVR Systems » Wealth Management Solutions » Trav
Slide 42: Dynamics of the strategy
Dynamics of the strategy 2009 2010 2011 2012 2013 Operating Margin GROUP Objective: 7 to 8%, catching TRANSFORMATION up with competitors Objective: DEPLOYMENT OF HTTS, ENGINE OF X2 GROUP DEVELOPMENT Organically •INNOVATION •NEW DISTINCTIVE OFFERINGS •TOPLINE GROWTH / CONSOLIDATE MARKET POSITIONING »
Slide 43: Delivering on our innovation roadmap
Delivering on our innovation roadmap Technology Cloud Computing Smart Utilities Social Green IT 14 January 2010 31 st March 2010 Economic Smart Mobility Social Computing Financial ECM& Collaboration 6 July 2010 4rth quarter 2010 43 Atos Origin H1 2010 results / 28 July 2010
Slide 44: Atos WorldGrid: new subsidiary dedicated to Smart Energy
Atos WorldGrid: Project for a new subsidiary, fully dedicated to Smart Energy solutions International roll out by geographies >> in mature countries and in high-growth geographies: -Germany, -Benelux, -Brazil, -China, -Iberia, -France, -India, -Middle-East and Africa, -UK, -USA Calendar for Atos Wor
Slide 45: Atos WorldGrid
Atos WorldGrid, A subsidiary dedicated to Smart Energy » Focus on innovative high-value solutions » Realize double-digit growth figures each year » Revenue 2010 : EUR 150 million (target to double in 2014) » Worldwide presence with 1,000 experts 45 Atos Origin H1 2010 results / 28 July 2010
Slide 46: Smart Mobility by Atos Origin
Smart Mobility by Atos Origin Wealth of contexts driving Launching Atos Origin Incubator Activity Presence Environment END USERS Users Location Identity Smart Mobility Third Parties Where am I? Privacy Services Services Device Community Knowledge CONTEXT BROKER PLATFORM 46 Atos Origin H1 2010 result
Slide 47: Smart Mobility services examples
A bicycle to move around in the Plan and pay your City, anytime, anywhere travel ticket Ticketing solution for Heathrow express Smart Smart Mobility Mobility Citizen Citizen Services Services Smart Smart Mobility Mobility Customer Customer Services Services Mobile Check In & Mobile Your mobile bank
Slide 48: M&A update
M&A update Objective: accelerating our development » A systematic review of available targets in: » Payments in line with the Hi-Tech Transaction Services strategy » New Technology Services to be roll out in Atos Origin geographies » IT businesses opportunities to consolidate market positions 48 Ato
Slide 49: Agenda
Agenda » H1 2010 Business overview » H1 2010 Performance » Dynamics of the strategy » 2010 Outlook 49 Atos Origin H1 2010 results / 28 July 2010
Slide 50: 2010 Objectives
2010 Objectives CONFIRMATION OF FULL YEAR GUIDANCE » Revenue: due to the Arcandor bankruptcy, the Group expects in 2010 a slight revenue organic decrease, however at a lesser extent than the one achieved in 2009 » Operating margin: ambition to improve OM by +50 to +100 basis points in 2010 » Cash fl
Slide 51: Questions
Questions Paris, 28 July 2010 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, Atos Worldline, Atos Sphere, Atos Cloud and Atos WorldGrid and the fish itself are registered trademarks of Atos Origin SA. June 2010 © 2010 Atos Origin. Confidential information owned by Atos Ori
Slide 52: Atos Origin First half 2010 results
Atos Origin First half 2010 results Management Conference call Paris, 28 July 2010 Atos, Atos and fish symbol, Atos Origin and fish symbol, Atos Consulting, Atos Worldline, Atos Sphere, Atos Cloud and Atos WorldGrid and the fish itself are registered trademarks of Atos Origin SA. June 2010 © 2010 At