First quarter of 2020 – Atos

A resilient profile and a potent harmony sheet to encounter an unparalleled predicament

Earnings at € 2,834 million

-.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organic expansion

Guide to invoice ratio at 103{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}

Renewals of main contracts in North The us

Suitable business mix to guidance clients in Covid-19 context

Necessary price steps being carried out to secure operating margin

SPRING transformation plan to an Field method very well on monitor

Update of 2020 objectives submit Covid-19

 

Paris, April 22, 2020,

Atos, a world wide chief in digital transformation, today announces the profits of its initially quarter of 2020.

Elie Girard, CEO, mentioned: “In this unparalleled environment wherever uncertainty prevails, our initially priority has been to secure our workforce whilst offering comprehensive continuity of provider to our clientele. The Group is solidly positioned to navigate efficiently by means of the crisis thanks to deep customer interactions throughout all industries, a resilient business mix and a sturdy harmony sheet that supplies a potent monetary overall flexibility.

Our 110,000 colleagues throughout the world have delivered an rapid and outstanding response to customers’ troubles and need to have for guidance by means of our “Always Ready” plan created by now given that the starting of the 12 months. Now our minds and endeavours are turning to the submit-Covid occasions, actively preparing for the “new normal” which will see an acceleration in particular customers’ requirements, specifically knowledge platforms, cybersecurity, cloud migration, digital place of work and decarbonization.

We revise today our objectives for 2020 demonstrating the resilience of the Group and the willingness to share any impact quite throughout stakeholders. I am certain that Atos will arise from this world wide crisis much better than ever and ready to move forward to the subsequent step.”

Q1 2020 revenue was € 2,834 million, down -.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically. In the context of Covid-19 crisis and limitations and lockdowns in March in most of the nations wherever the Group operates, profits decreased only a little thanks to the resilient profile of its companies centered on multi-12 months contracts blended with its reliable business in Huge Information and Cybersecurity. Furthermore, and in spite of the crisis, the Group accelerated its commercial dynamism with get entry at € 2,908 million foremost to a book to invoice ratio of 103{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}, significantly up when compared to previous 12 months at 86{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}.

Q1 2020 profits general performance by Field

In € million	Q1 2020	Q1 2019*	Natural and organic evolution
Manufacturing	539	555	-2.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Monetary Products and services & Insurance coverage	527	542	-2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Public Sector & Protection	584	566	+three.2{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Telecom, Media & Technology	443	439	+.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Methods & Products and services	418	416	+.4{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Health care & Existence Sciences	323	340	-4.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Whole Group	2,834	2,858	-.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
* At constant scope and exchange prices

 

Manufacturing reached € 539 million of profits, down -2.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} at constant scope and exchange prices. The Field benefitted from a fantastic general performance in Automotive with the ramp-up of a German auto corporation and Rheinmetall on knowledge management contracts, compensating the impact in Daimler due to Covid-19 and the ramp down of PSA. Conversely, Manufacturing was impacted by reduced volumes with Siemens, a slowdown in the Aerospace sector due to Covid-19, and quite a few shifts of devices product sales to the end of the quarter.

Monetary Products and services & Insurance coverage profits was € 527 million in the initially quarter 2020, down by -2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as very well as the enhancement of activity with a payment corporation in France which have far more than compensated for the reduction of volumes from banking institutions in Central Europe. Rising marketplaces experienced from non-recurring product sales executed previous 12 months in APAC and Middle East & Africa. In North The us, task centered things to do reduce by now observed in past quarters was accelerated in March due to choices from quite a few Monetary Products and services firms to postpone or reduce discretionary charges in the context of Covid-19.

Public Sector & Protection profits was € 584 million, up +three.2{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} at constant scope and exchange prices. The expansion was pushed by the potent general performance recorded in Northern Europe, thanks to the continuation of the contract with European Middle for Medium variety Weather conditions forecast as very well as with EU Lisa and clever knowledge system in Benelux. North The us realized security inspite of reduced volumes, thanks to added product sales on existing contracts. The predicament was far more demanding in Southern Europe, impacted by the ramp-down of Substantial Effectiveness Computing activity as very well as non-recurring product sales executed previous 12 months. Central Europe was negatively impacted by reduced volumes, and last but not least Rising Markets was impacted by profits recorded previous 12 months for the Tokyo Olympic Online games preparation and not recurring this 12 months.

Telecom, Media & Technology reached € 443 million, up +.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically, with a contrasted general performance by geography and by activity. Substantial Tech & Technology posted a potent expansion, pushed by Unified Conversation & Collaboration offerings in Central Europe, sustained by organic expansion of newly obtained corporation Maven Wave in North The us and contract ramp-up with a massive spouse, as very well as added product sales in Southern Europe. Media improved as very well, benefitting from new business enhancement, coupled with higher volumes with existing clients in North The us. Telecom activity was predominantly impacted by some ramp-downs in Southern Europe.

Earnings in Methods & Products and services reached € 418 million and improved by +.4{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically. Organization in Vitality & Utilities sector fueled the expansion. In certain, the Field sent a Substantial Effectiveness Computer system in South The us. Digital place of work solutions ramped-up with a main Vitality provider in North The us and with National Grid in Northern Europe. The predicament in Retail, Transportation & Hospitality sectors was far more demanding in the context of Covid-19. In truth, whilst the ramp-up of a new IoT contract signed in the area of predictive upkeep benefitted to North The us, the Field confronted volume reductions in Europe.

Health care & Existence Sciences profits was € 323 million, down by -4.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} when compared to Q1 2019, impacted by volume reductions on very particular contracts in both equally North The us and Northern Europe, whilst the business benefitted from the ramp-up of a world wide contract with Bayer and a digital place of work contract signed previous 12 months in Central Europe, and the ramp-up of an Australian Public Agency contract in Rising Markets. Southern Europe benefitted from a potent activity in digital assignments and Substantial Effectiveness Computing.

 

Q1 2020 profits general performance by Regional Organization Unit

 

In € million	Q1 2020	Q1 2019*	Natural and organic evolution
North The us	681	699	-2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Northern Europe	698	696	+.three{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Southern Europe	594	609	-2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Central Europe	667	660	+1.{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Rising Markets	194	192	+1.{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Whole Group	2,834	2,858	-.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
* At constant scope and exchange prices

The initially quarter of 2020 confirmed unique profits evolution by Regional Organization Models which can be summarized as follows:

• In North The us, profits reached € 681 million, reducing by -2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically predominantly coming from Covid-19 prompted task stops and volume reductions in quite a few Industries. The Organization Unit realized expansion in Telecom, Media & Technology and Methods & Products and services thanks to new brand, higher volumes and ramp up of existing contracts
• In Northern Europe, profits was approximately stable at € 698 million. Solid business was recorded in Public Sector & Protection predominantly led by the continuation of the HPC contract with European Centre for Medium Vary Weather conditions Forecast, as very well as by deliveries to European Union Institutions. Telecom, Media & Technology and Manufacturing confronted some contracts ending and Health care & Existence Sciences a reduction on Organization Course of action Outsourcing contracts
• In Southern Europe, profits reached € 594 million, reducing by -2.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} Health care & Existence Sciences posted a double-digit expansion thanks to digital assignments sent and Substantial Effectiveness Computing things to do. The geography was impacted by non-recurring product sales also on Substantial Effectiveness Computing things to do executed previous 12 months in quite a few Industries
• In Central Europe, the geography improved organically by +1.{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} foremost to a € 667 million Manufacturing benefitted from quite a few ramp-up of infrastructure contracts and added assignments. Earnings in Telecom, Media & Technology also improved, pushed by Unified Conversation & Collaboration business. Health care & Existence Sciences posted a double-digit expansion predominantly fueled by new contracts. Public Sector & Protection was impacted by non-recurring product sales and assignments realized previous 12 months whilst new assignments in SAP HANA and in Digital have been executed in Germany and in Austria. Ultimately, Methods & Products and services was impacted by a reduced desire in Unify Conversation channels
• Rising Markets reached € 194 million profits, +1.{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} Manufacturing posted a reliable expansion, pushed by a higher degree of product sales as very well as much better desire in digital assignments predominantly in Asia-Pacific and South The us. Earnings in Useful resource & Products and services strongly improved fueled by Substantial Effectiveness Computing activity in South The us whilst the predicament was far more demanding in Monetary Products and services predominantly in Asia Pacific.

Q1 2020 profits general performance by Division

 

In € million	Q1 2020	Q1 2019*	Natural and organic evolution
Infrastructure & Information Management	1,558	1,566	-.5{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Organization & System Methods	1,016	1,069	-4.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Huge Information & Cybersecurity	259	223	+16.three{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Whole Group	2,834	2,858	-.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
* At constant scope and exchange prices

In Infrastructure & Information Management (IDM), profits was € 1,558 million, -.5{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically. The Division continued to roll-out its transformation model by extending Hybrid Cloud Orchestration as very well as expanding Digital Office implementation.

The particular predicament due to Covid-19 pandemic necessary a reliable business continuity for essential infrastructures for its clients. In truth, the Division recorded a potent desire on Digital Office methods (accessing programs from wherever), enterprise interaction offerings with Unified Collaboration & Conversation, network connections, and many others. These things to do are connected to the remote functioning that has been put in place by a ton of companies to encounter the lockdown and manage their activity.

Ultimately, in the recent context, the Division recorded much less profits created by devices product sales and fertilization in existing contracts in March.

In Organization & System Methods (B&PS) profits was € 1,016 million, -4.nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically. As a reminder, the Division was down -1.2{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} in This fall 2019 due to the headwinds in Monetary Products and services in North The us as very well as in Automotive business in Germany, and as a result did not be expecting any enhancement in the starting of 2020 even ahead of Covid-19.

In the new context of Covid-19, the Division experienced to encounter a slowdown in most of the Industries. In truth, this business segment is significantly far more dependent from the cycle and clients started in March to postpone discretionary assignments. The Group considers that the most impacted things to do will be Technology Professional Products and services requiring engineers functioning on buyer sites, that can not be executed on a remote manner (circa 30{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} of Organization & System Methods profits). On the reverse, Application Progress and Routine maintenance, centered on lengthy term contracts ought to be resilient (circa forty{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} of Organization & System Methods profits). In amongst, a massive element of essential Digital Tasks (circa 30{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} of Organization & System Methods profits) can be executed on a remote manner, but the volume of the business will rely in the subsequent months from the buyer requires on new assignments.

The business in Huge Information & Cybersecurity (BDS) remained potent with profits up +16.three{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} organically at € 259 million in the initially quarter of 2020. In the recent context, the remote functioning as very well as the boost of cyberattacks led companies to fortify the safety of their infrastructure and knowledge. As illustrations, clients requested for far more methods of identification in fast manner, and consulting on the solidity of their safety infrastructure.

In Huge Information, there was no discontinuity in the provide chain thanks to professional-lively inventory management. The desire continues to be potent in Substantial Effectiveness Computing. As an example, remote accessibility to SAP HANA requires added processing electric power and as a result greater requirements of Sequana S in-memory servers. Ultimately, Mission Important System business also recorded a substantial profits expansion.

Industrial activity

Throughout the initially quarter of 2020, the Group get entry reached € 2,908 million symbolizing a Guide to Invoice ratio of 103{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}, when compared to 86{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} realized over the very same period previous 12 months.

The major new contracts signed over the period have been notably in North The us with a massive American corporation in Protection Sector (Telecom, Media & Technology), in Central Europe with Norddeutsche Landesbank (Monetary Products and services & Insurance coverage) and a world wide european pharmaceutical corporation (Wellbeing & Existence Sciences) and in Southern Europe with a main utility in France and with Ile-de-France Mobilités (Methods & Products and services), as very well as with a French banking institution (Monetary Products and services & Insurance coverage).

Agreement renewals of the quarter incorporated massive signatures with notably the initially element of the renewal of Texas Division of Details Methods contract (Public Sector & Protection), the renewal of Conduent contract (Telecom, Media & Technology) in North The us, a contract with a International European company in funds merchandise for SAP HANA (Manufacturing) in Central Europe, as very well as with the French UGAP (Public Sector & Protection) in Southern Europe.

In line with this dynamic commercial activity, the comprehensive backlog amounted to € 22.1 billion at the end of March 2020, symbolizing 1.nine 12 months of profits. The comprehensive capable pipeline reached € 7.six billion, symbolizing 7.8 months of profits.

Human means

The full headcount was 108,602 at the end of March 2020, broadly stable when compared to 108,317 at the end of December 2019.

In the initially quarter of 2020, the Group employed 5,043 staff, predominantly in offshore nations.

How Atos handles Covid-19 impact

Since end of January, the Group management, supported by Group Human Methods, has been focusing on the well being and safety of workforce whilst making sure a right implementation of pre-described business continuity plans in each and every Division.

The Group also activated the “Always Ready” plan, pulling collectively all Group methods particularly adapted to this distressed predicament and being proactively made available to clients to support them go by means of the crisis: guidance to generalized homeworking such as collaboration capabilities, particular guidance to public & well being institutions, reinforcement of cybersecurity protections, and many others. Customers’ comments and satisfaction with regards to Atos groups reactivity has been overwhelmingly positive. Atos is also associated into many governmental assignments throughout the world to struggle versus the virus, and prepare the progressive aid of limitations and lockdowns.

To secure its operating margin, the Group has taken potent steps on its price foundation in the following parts:

• Solid centralized checking of personnel fees (hiring freeze, cancellation of salary increases, impact on variable compensation, vacations, and many others.)
• Substitute of subcontractors by have freed up staff
• Cancellation of non buyer linked discretionary charges
• Solid conserving plan on non personnel fees.

In full, the Group introduced a plan symbolizing a full quantity of c. four hundred million euros of savings in 2020.

Up-to-date 2020 objectives submit Covid-19

As the 2020 objectives disclosed on February 19, 2020 have been pre Covid-19 outcome, the Group updates today its a few objectives for the comprehensive 12 months 2020, centered on the recent macroeconomic circumstance of a progressive restoration over H2 2020 and 2021, as very well as the management’s every day discussions with Group clients:

• Earnings organic evolution: amongst -2{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} and -4{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} (compared to c. +2{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} pre Covid-19)
• Operating margin price: nine{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} to nine.5{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} of profits (compared to +20 bps to + forty bps higher than 2019 (10.three{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} documented) pre Covid-19)
• No cost hard cash movement: € .5 billion to € .six billion (compared to c. € .7 billion pre Covid-19)[*].

The Group suspends its targets for 2021, the previous 12 months of the a few-12 months plan introduced at the Investor Day held on January 30, 2019. The Group will current its eyesight as very well as its mid-term targets at the 2020 Analyst Day (day to be rescheduled).

Postponement of Yearly Common Assembly and extraordinary cancellation of dividend payment in 2020

Due to the extraordinary situation connected to the Covid-19, the Board of Directors, which fulfilled on March 31, 2020, has determined to postpone the Yearly Common Assembly originally scheduled on May fourteen, 2020 to June 26, 2020.

In these unparalleled situation, through its session on April 21, 2020, the Board of Directors took the extraordinary decision not to suggest the 1.forty euro for every share dividend which was originally deemed to be submitted to the Yearly Common Assembly. In addition, the Chief Executive Officer as very well as other customers of the Common Management Committee have determined to reduce by 30{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} their compensation through the recent a few-month period from March to May 2020. The Chairman of Atos’ Board of Directors has created the very same decision.

The Group confirms that the cancellation of the dividend this 12 months is an exception to its dividend plan with a spend-out ratio amongst twenty five{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} and 30{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} of Internet money Group share.

 

Appendix

Earnings at constant scope and exchange prices reconciliation

In € million	Q1 2020	Q1 2019	{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad} transform
Statutory profits	2,834	2,818	+.six{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Trade prices outcome		26
Earnings at constant exchange prices	2,834	2,843	-.three{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}
Scope outcome		fourteen
Trade prices outcome on obtained/disposed perimeters		1
Earnings at constant scope and exchange prices	2,834	2,858	-.8{ae9868201ea352e02dded42c9f03788806ac4deebecf3e725332939dc9b357ad}

Scope consequences amounted to €+fourteen million for profits and are predominantly linked to the acquisition of Maven Wave, consolidated as of February 1, 2020 (2 months for €+18 million), the acquisition of IDnomic, consolidated as of October 1, 2019 (three months for €+4 million), the acquisition of X-PERION, consolidated as of December 1, 2019 (three months for €+2 million), the disposal of some particular Unified Conversation & Collaboration things to do largely in Q1 2020 (full restatement of €-4 million) as very well as former ITO things to do in the United kingdom starting of H2 2019 (three months for €-4 million), and last but not least the disposal and decommissioning of non-strategic things to do in just CVC.

Currency exchange prices consequences largely came from the American dollar as very well as the British pound and positively contributed to profits for €+26 million.

 

Meeting simply call

Today, Wednesday, April 22, 2020, the Group will hold a meeting simply call in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in get to comment on Atos’ Q1 2020 profits and reply thoughts from the monetary local community.

You can join the webcast of the meeting:

• on web, in the Traders segment
• by smartphones or tablets by means of the scan of:
• by phone with the dial-in, 5-10 minutes prior the starting time:
  • France             +33 1 70 70 07 81       code 12652364
  • Germany             +forty nine 69 2222 2625       code 12652364
  • United kingdom             +44 844 481 9752       code 12652364
  • US             +1 646 741 3167         code 12652364
  • Other nations +44 2071 928338        code 12652364

Just after the meeting, a replay of the webcast will be available on atos.web, in the Traders segment.

 

Forthcoming gatherings

June 26, 2020              Yearly Common Assembly

July 27, 2020               Initially half 2020 success

October 22, 2020         3rd quarter 2020 profits

To be scheduled            2020 Analyst Day