Atos SE · EURONEXT:ATO
Atos — Atos Origin — FY2001 Earnings Presentation
36 slides from Atos's earnings presentation, 2002
Slide 1: Year 2001 Results
Year 2001 Results Bernard Bourigeaud
Slide 2: Agenda
Agenda • GROUP ACHIEVEMENTS • YEAR 2001 BUSINESS PERFORMANCE • YEAR 2002 OUTLOOK • STRATEGY 2 Year 2001 Results Turning Client Vision into Results
Slide 3: Group achievements
Group achievements • Operating profit of € 261M (8.6% margin) • 9% operating margin in quarter 4 • All countries profitable • Organic revenue growth of 7.3% • Net debt reduced to € 235M at year-end • Recent significant commercial wins • Disposal of non-strategic assets Merger completed in record tim
Slide 4: Atos Origin today
Atos Origin today End to end Global Balanced offerings presence industry mix Asia Pacific Retail & On Line 2% Process Public Americas CPG Services Other 14% 7% industries 7% sector & EMEA 25% other Consulting & 15% France 36% 7% Systems Integration Managed 49% Central Financial Services Europe 37% 9
Slide 5: Agenda
Agenda • GROUP ACHIEVEMENTS • YEAR 2001 BUSINESS PERFORMANCE • YEAR 2002 OUTLOOK • STRATEGY 5 Year 2001 Results Turning Client Vision into Results
Slide 6: Financial performance
Financial performance In € Millions FY 2001 FY 2000 % change Revenue 3,038 2,830 7.3% Income from operations 261.2 175.2 49.1% Operating Margin % 8.6% 6.2% 2.4 pts Net Income after goodwill 123 70.5 74.5% EPS before goodwill (in €) 3.3 2.1 61.5% EPS after goodwill (in €) 2.8 1.6 73.7% Average # empl
Slide 7: Operating profit drivers
Operating profit drivers • Business increase € 27M • Impact of economic slowdown € (19)M – Particularly in USA and Asia Pacific • Re-organization by profit center € 63M – Reduction just over 1 500 people – Closure of 40 sites & data centers • Other cost control actions € 15M – Corporate streamlining
Slide 8: Quarterly impact
Quarterly impact Rigorous management of profitability In € Millions Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2001 Revenue 757 761 723 797 3,038 Revenue Growth 6.5% 10.1% 6.2% 6.7% 7.3% Income from Operations 62.1 66.7 61.0 71.4 261.2 Operating margin % 8.2% 8.8% 8.4% 9.0% 8.6% 8 Year 2001 Results
Slide 9: Cash Flow impact
Cash Flow impact In € Millions FY 2001 Net indebtedness, Dec. 31, 2000 -114 Operating cash flow 397 Capital Expenditure -128 Free cash flow from operations 269 Restructuring -140 Fair value adjustments -69 Disposals 34 Acquisitions & investments -213 Other cash items -2 Net cash Flow -121 Net indebt
Slide 10: Balance sheet performance
Balance sheet performance In € Millions 31-Dec-00 30-Jun-01 31-Dec-01 Goodwill 310 356 405 Other fixed assets 263 271 366 Working capital 276 246 193 Total capital employed 848 873 965 Equity 330 420 479 Provisions 405 339 251 Net indebtedness 114 113 235 Total financing and provisions 848 873 965 R
Slide 11: Provisions 2001
Provisions 2001 Provisions Variance analysis in € millions 2000 2001 Change Scope adj. FVA cash Restr. Restr. Operations Changes 2001 cash 2001 cash 2002 FVA* Origin 129 75 -54 15 -69 Merger Integration 160 25 -135 -121 -14 Discontinued operations 14 0 -14 -14 Reorganization 111 20 -91 -77 -14 Ratio
Slide 12: Provisions trend
Provisions trend • Fair value adjustments € 75M – Risks identified at Origin merger – Provisions for risks released if materialized • Merger restructuring € 25M – Provisions fully released in 2002 • Operations € 58M – On-going operations at usual trends – € 10M further restructuring released in 2002
Slide 13: Consulting & Systems Integration
Consulting & Systems Integration Solid improvement in profitability In € Millions FY 2001 FY 2000 Growth Revenue 1,489 1,484 0.3% • Improved profitability in the Netherlands Income from operations 133.7 116.1 15.1% • Strong growth of integration Operating margin % 9.0% 7.8% 1.2 pts activities in Fra
Slide 14: Managed Services
Managed Services Breakthrough in Managed Services In € Millions FY 2001 FY 2000 Growth Revenue 1,120 942 18.9% • Major wins with KPN and Euronext Income from operations 127.9 99.6 28.5% • Improved profitability Operating margin % 11.4% 10.6% 0.9 pts • End to end solutions Average headcount 7,313 6,3
Slide 15: On Line Services
On Line Services Re-focusing In € Millions FY 2001 FY 2000 Growth Revenue 428 404 6.0% • Disposal of customer contact centers Income from operations 44.8 48.7 -8.1% • Extending operations to Operating margin % 10.5% 12.1% -1.6 pts global clients Average headcount 5,395 4,665 15.6% • Consistent finan
Slide 16: Global presence
Global presence All countries Profitable Operating In € Millions FY 2001 FY 2000 Growth Headcount margin % France 1,089 952 14.5% 9.8% 10,319 Netherlands 797 669 19.2% 14.7% 6,259 EMEA 877 864 1.5% 8.6% 7,848 Americas 207 268 -22.7% 2.6% 1,740 Asia Pacific 66 77 -14.4% 1.5% 1,149 Corporate - - - -1.
Slide 17: Country highlights
Country highlights • United Kingdom – Well-managed turnaround to profitability – Recent major commercial wins (United Biscuits, Vantico, Uniq…) • Germany – Vigorous execution of restructuring plan – Substantial improvement in profitability • North America – Drastic restructuring action and refocused
Slide 18: 2001 business performance
2001 business performance • Top 42 global accounts represent 55% of revenue • Global accounts (excl. Philips) grew at >25% • Philips revenues : € 519M vs € 540M budget • KPN - major outsourcing contract • Euronext - Brussels & Amsterdam exchanges • Other commercial wins 18 Year 2001 Results Turning
Slide 19: KPN
KPN Building-up a strategic alliance • Data center outsourcing – Minimum revenues of EUR 1.1 billion over 6 years – Taking control of 7 data centers – More than 1,000 employees transferred to Atos Origin – Contract will increase Managed Services revenues by over 20% • End user services • Software ho
Slide 20: Year 2001 major wins
Year 2001 major wins France, Spain, Italy, South America AG2R- Agip - André - Arca SIM - Auchan - Autostar - Avaya - Banca d’Italia - Bayard - Bouygues Telecom - Canon - Credito y Caucion - EADS - ED – Embelleze -Ernst & Young - Exxon - Firstmark - Frost Iberica -GRTI- Harmon Siliani - Intermarché -
Slide 21: Year 2001 major wins
Year 2001 major wins Netherlands, UK, Belgium… Akzo Nobel - BP - CAN - Daikin - Electro Components - Eneco - Flextronic - IMJV - Ineos - ING - Interbrew - Johnson & Johnson - KLM - KPN - Levis, EMEA HQ - Ministry of Environment - Northern Foods - Philip Morris - Philips - Philips Medical Syst. - Phi
Slide 22: Agenda
Agenda • GROUP ACHIEVEMENTS • YEAR 2001 BUSINESS PERFORMANCE • YEAR 2002 OUTLOOK • STRATEGY 22 Year 2001 Results Turning Client Vision into Results
Slide 23: Management board
Management board Management Region Service lines Market Board Members responsibility Responsibility Responsibility • B. Bourigeaud, CEO • Central Europe • MS Global • Banking • W. Kieboom • NL, UK, Belux • C&SI Global • Telecom • D. Illien • Fr, It, Sp, LAm • OLS Global • Retail / CPG • T. Lomax • U
Slide 24: Business model
Business model Market Managers Financial Retail & Process High-Tech Telecom services CPG Industries Global Account Managers International International C&SI C&SI Global Global MS MS Global Global OLS OLS Global Global Competencies Competencies & & Alliances Alliances Solution Directors 24 Year 2001
Slide 25: Clients
Clients High Tech & Telecom Process industries Financial Services Philips (Worldwide) Alstom (6 countries) ABN Amro (Frce, Brazil, Nl) Lucent (8 countries) Akzo Nobel (Worldwide) BNP Paribas (France) France Telecom (France) Acordis (3 countries) Credit Lyonnais (France) KPN (Netherlands) EDF (France
Slide 26: The Joint-Venture model
The Joint-Venture model • The JV model with clients : e.g. Atos Euronext • Between total outsourcing and total in-house processing • Benefits for clients • Benefits for employees • Benefits for shareholders 26 Year 2001 Results Turning Client Vision into Results
Slide 27: 2002 business outlook
2002 business outlook Business environment • Consulting & systems integration – business has slowed down globally – year on year decline expected in H1 2002 • Managed Services – strong year on year growth expected based on order book – market opportunities to capture long term growth • On Line Servi
Slide 28: 2002 business outlook
2002 business outlook Total group backlog Jan. 2001 Jan. 2002 Total Backlog In € M In years In € M In years Consult. & Systems Integration 820 0.6 830 0.6 Managed Services 1,832 1.5 3,320 3.0 On Line Services 890 2.2 760 2.2 Total Atos Origin 3,542 1.2 4,910 1.6 Balanced business structure 28 Year 2
Slide 29: Plan of action: Revenue growth
Plan of action Revenue growth • Global account management • Market management • Solutions management 29 Year 2001 Results Turning Client Vision into Results
Slide 30: Plan of action: Profitability
Plan of action Profitability Stage 2 restructuring • Further matching of staff resources to demand • Building efficient business support organizations • Further premises and data centers rationalizations • Reduced subcontractors • Additional group purchasing benefits 30 Year 2001 Results Turning Cli
Slide 31: 2002 financial outlook
2002 financial outlook 10% Operating margin - Top priority Atos Origin FY 2000 FY 2001 FY 2002 Revenue Growth 3.8% 7.3% 7-9% Operating margin % 6.2% 8.6% 10% 31 Year 2001 Results Turning Client Vision into Results
Slide 32: Agenda
Agenda • GROUP ACHIEVEMENTS • YEAR 2001 FINANCIAL & BUSINESS PERFORMANCE • YEAR 2002 OUTLOOK • STRATEGY 32 Year 2001 Results Turning Client Vision into Results
Slide 33: Values
Values • Customer dedication • Commitment to execute • Conviviality • Entrepreneurship and team spirit • Profitability 33 Year 2001 Results Turning Client Vision into Results
Slide 34: Backdrop for 2002
Backdrop for 2002 • Tougher environment in 2002 – Large companies to cut down IT spending • IT environment is moving – France, NL, Germany, UK – US companies’ ambition – European companies : need for restructuring – Non successful mergers – Big 5 to separate consulting from audit Atos Origin ahead o
Slide 35: Vision
Vision • End to end service offerings • Balanced mix of consulting, build and run • Capitalize on industry sector knowledge • Develop a focused management consulting practice • Focus on clients • Leverage strong HR management Build on global presence 35 Year 2001 Results Turning Client Vision into R
Slide 36: The way forward
The way forward • Merger completed in record time • International team in place • Strong focus on achieving 10% operating margin • Client-centric company with global operations 36 Year 2001 Results Turning Client Vision into Results