Atos Se · EURONEXT:ATO
Atos — H1 2020 Earnings Presentation
27 slides from Atos's earnings presentation, Jul 27, 2020
Slide 1: H1 2020 results
H1 2020 results Bezons July 27, 2020
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.H1 2020 highlights 2.H1 2020 performance 3.Conclusion and Q&A
Slide 4: H1 2020 highlights
H1 2020 highlights Elie Girard Chief Executive Officer
Slide 5: H1 2020 Highlights
H1 2020 HIGHLIGHTS l Strong sales l Spring l Covid-19 cost l Cybersecurity, l Worldline sale activity transformation saving actions Decarbonization providing room +9% Order Entry driving Industry well on track and Bolt-on for sizeable and yoy dynamic across acquisitions transformative the Group mome
Slide 6: H1 2020 Key Figures
H1 2020 KEY FIGURES Revenue organic evolution Operating margin rate Free cash flow -2.8% 8.0% €-172m Q2 at -4.8% 9.1% in H1 2019 Shifts to H2 Normalized diluted EPS Total headcount €2.93 106,980 €3.21 in H1 2019* -1.6% vs December 2019 at constant scope *from continuing operations
Slide 7: Strong commercial dynamic in H1 2020
STRONG COMMERCIAL DYNAMIC IN H1 2020 Order entry Book to bill ratio €6.3bn 121% in Q2 +9.4% YoY 112% in H1 2020 Backlog Weighted pipeline €22.5bn €8.6bn € +0.6bn vs December 2019 € +1.2bn vs December 2019
Slide 8: Flagship deals signed in every industry in Q2 2020
FLAGSHIP DEALS SIGNED IN EVERY INDUSTRY IN Q2 2020 MANUFACTURING FINANCIAL SERVICES PUBLIC SECTOR TELECOM, MEDIA RESOURCES HEALTHCARE & INSURANCE & DEFENSE & TECHNOLOGY & SERVICES & LIFE SCIENCES Equipment Loans group in US financial Global Belgian grid manufacturer the UK services producer of opera
Slide 9: Offerings in the pipe with high replicability potential
OFFERINGS IN THE PIPE WITH HIGH REPLICABILITY POTENTIAL FULL STACK CLOUD DIGITAL WORKPLACE DIGITAL SECURITY DECARBONIZATION l Application l Migration to cloud l Identity/Privileged l Decarbonization modernization – based with Microsoft Access Management assessments replatforming of business and VMwa
Slide 10: Spring transformation: step 1 completed, off to step 2
SPRING TRANSFORMATION: STEP 1 COMPLETED, OFF TO STEP 2 H1 2020 H2 2020 ► Setup of 6 Industries ► Transfer client facing roles from Divisions to account teams in ► Ramp-up of vertical portfolio Industries ► Development of Industry-specific Go- ► Ramp-up of Industry Consulting & to-Market Marketing ►
Slide 11: Key enablers to support transformation
KEY ENABLERS TO SUPPORT TRANSFORMATION TECH DAYS 500 clients from 50 countries, 100 partners & startups SCALER Open innovation accelerator with 15 startups per year First Innovation Week TECHNOLOGY SKILLS New certifications up 50%+ to 34K during Covid period EMPLOYEE Employee share plan: x3 subscrip
Slide 12: 2020 objectives confirmed
2020 OBJECTIVES CONFIRMED Revenue organic evolution -2% to -4% Operating margin rate in % of revenue 9.0% to 9.5% Free cash flow €500m to €600m
Slide 13: Financial performance
Financial performance Uwe Stelter Chief Financial Officer
Slide 14: Constant scope and exchange rates figures reconciliation
CONSTANT SCOPE AND EXCHANGE RATES FIGURES RECONCILIATION In € million H1 2020 H1 2019 % change Statutory revenue 5,627 5,744 -2.0% Exchange rates effect 14 Revenue at constant exchange rates 5,627 5,758 -2.3% Scope effect 32 Exchange rates effect on acquired/disposed perimeters 2 Revenue at constant
Slide 15: H1 2020 performance by industry
H1 2020 PERFORMANCE BY INDUSTRY Manufacturing 12% 18% Financial Services & Insurance ▶ Application project delays, reduction on discretionary expenses in Q2 14% Public Sector & Defense ▶ Strong growth in Public Sector & Defense 19% Telecom, Media & Technology 15% ▶ Manufacturing impacted in Automoti
Slide 16: H1 2020 performance by regional business unit
H1 2020 PERFORMANCE BY REGIONAL BUSINESS UNIT ▶ Northern Europe, Central Europe, and Growing Markets resilient 7% North America 24% ▶ Application project delays and volume reduction in North America 20% Northern Europe ▶ Project postponements and less Big Data in Southern Europe Central Europe ▶ Str
Slide 17: H1 2020 revenue performance by division
H1 2020 REVENUE PERFORMANCE BY DIVISION ▶ Resilient Infrastructure & Data Management business also in Infrastructure & Data 10% Q2 on the back of multi-year contracts as well as higher Management Digital Workplace activity Business & Platform Solutions ▶ Business & Platform Solutions impacted as ant
Slide 18: Syntel synergies
SYNTEL SYNERGIES CONTINUATION OF SALES, DELIVERY & COST SYNERGIES IN 2020 H1 H1 Revenue l 107 Deals > €1M closed in H1. Pipeline Operations l 97% Working from Home, Synergies opportunities of €1.0Bn Highlight Rapid transition with no miss on SLA or customer deliverables l Leveraging both Atos and Sy
Slide 19: Follow up 2020 cost initiatives to face Covid-19 impact
FOLLOW UP 2020 COST INITIATIVES TO FACE COVID-19 IMPACT FY H1 H2 Total Costs impact* €400m 43% 57% Of which: Third party spend €170m 24% 76% Hiring Freeze / Part- Time / Furlough €80m 37% 63% Salary freeze & Variable compensation €90m 71% 29% Travel freeze €40m 58% 42% Other €20m 62% 38% *versus ini
Slide 20: Income statement
INCOME STATEMENT In € million H1 2020 H1 2019 Revenue 5,627 5,744 From operating margin Operating margin 450 529 to net income** % of revenue 8.0% 9.2% H1 2020 includes Reorganization, Rationalization, Integration & acquisition costs -122 -104 Worldline impacts: Amortization of intangible assets (PP
Slide 21: Free cash flow
FREE CASH FLOW In € million H1 2020 H1 2019 Operating Margin before Depreciation & Amortization 774 835 as a % of revenue 13.8% 14.5% Change in Working Capital Expenditures -186 -173 Capital Requirement Lease payments -172 -167 includes: Change in working capital requirement -407 -269 Cash from oper
Slide 22: Bridge FCF: from H1 to FY
BRIDGE FCF: FROM H1 TO FY c. 10 c. 25 c. 50 c. 15 c. 65 c. 20 c. -60 c. 15 500-600 582 -172 FCF H1 2020 FCF H2 2019 OMDA Pension Capex Cost of debt Sales of Large HPC Supplier Others FCF FY 2020 reported decrease receivables project payments excl. Pension evolution completions H2 20 vs H2 19
Slide 23: H1 2020 headcount evolution
H1 2020 HEADCOUNT EVOLUTION +7,176 -6,372 +374 -2,515 106,980 108,317 Headcount as of Scope Hiring Leavers Restructuring Headcount as of 31/12/19 & dismissals 30/06/20
Slide 24: Conclusion
Conclusion Elie Girard Chief Executive Officer
Slide 25: H2 2020 main priorities
H2 2020 MAIN PRIORITIES Complete Covid-19 cost Sustain high level of commercial activity saving and cash conversion plans Implement SPRING Pursue bolt-on step 2 acquisitions On track to deliver 2020 objectives as an important step towards mid-term targets | 25-07-2019 | © Atos
Slide 26: Q&A
Q&A
Slide 27: Thank you
Thank YOU