Atos Se · EURONEXT:ATO
Atos — Atos Origin — FY2010 Earnings Presentation
58 slides from Atos's earnings presentation, Feb 16, 2011
Slide 1: Full Year 2010 Results
FULL YEAR 2010 RESULTS Paris, February 16th, 2011 1 CORPORATE PRESENTATION www.atosorigin.com
Slide 2: Disclaimers
Disclaimers Atos Origin, scope at 16 February 2011: » The presentation contains further forward-looking statements that involve risks and uncertainties concerning the Group's expected growth and profitability in the future. Actual events or results may differ from those described in this presentatio
Slide 3: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 3 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 4: 2010: We reached our commitments
2010: We reached our commitments Guidance Achievement Ambition to improve by +50 Operating Margin to +100 basis points 6.7% with . H1: 6.0% compared to 2009 i.e. 6.2% - 6.7% . H2: 7.4% Objective to confirm the Operating Cash Flow : improvement achieved in - 2009: EUR 117 M Cash Generation 2009 by ge
Slide 5: 2010 Highlights (1/2)
2010 Highlights (1/2) Agreement with Siemens » Global partnership » To acquire Siemens Information Services (SIS) Improved commercial activity » Book to Bill ratio at 111% in 2010 (125% in Q4 2010) compared to 100% in 2009 (89% in Q4 2009) » Implementation of sales organization by market (GAMA) TOP
Slide 6: 2010 Highlights (2/2)
2010 Highlights (1/2) HTTS Strategy and Specialized Businesses » Roll-out in new geographies » First signatures and increasing pipeline » WorldGrid Building the future by accelerating innovation » Scientific Community » New Global Key Offerings 6 Full year 2010 Results - Paris, February 16th, 2011 w
Slide 7: Solid commercial activity in Q4 2010
Solid commercial activity in Q4 2010 » Q4 2010 order entry at EUR 1,650 M representing +39% compared to Q4 2009 Consulting + Systems Managed Services + Book to Bill Total Group Integration HTTS + Medical BPO Q4 2010 125% 104% 139% Q4 2009 89% 94% 85% Q4 Book to Bill ratio reached 125% compared to th
Slide 8: Improved commercial activity
Improved commercial activity » Total order entry of EUR 5 590 M representing a book to bill ratio at 111% Total Systems Managed Book to Bill Consulting HTTS Group Integration Services FY 2010 111% 109% 113% 93% 113% FY 2009 100% 93% 96% 106% 119% » Full qualified pipeline at EUR 2.7 B, compared to E
Slide 9: Some customers' contracts won in Q4 2010 (1/3)
Some customers’ contracts won in Q4 2010 (1/3) FRANCE Service Customers Deals Line Rexel MS Infrastructure outsourcing FT Orange MS Application Landscape Program Management - Renewal EADS - Airbus SI Development and Maintenance on Management tools DGAC - DSNA MS Telco & Network Services - Renewal Mi
Slide 10: Some customers' contracts won in Q4 2010 (2/3)
Some customers’ contracts won in Q4 2010 (2/3) NETHERLANDS Service Customers Deals Line Openbaar Ministerie MS Outsourcing OM Philips SI Professional Services Contracting for 2011 - Renewal Sociale Verzekeringsbank MS Mainframe Albert Heijn BV SI Application Management Contract - Renewal Achmea IT S
Slide 11: Some customers' contracts won in Q4 2010 (3/3)
Some customers’ contracts won in Q4 2010 (3/3) ATOS WORLDLINE Service Customers Deals Line ING HTTS Acquiring Processing Services - Renewal Cortal Consors HTTS New Platform Exploitation ABN Amro HTTS Acquiring Processing Services Argenta HTTS Issuing Contract - Renewal Oman HTTS UCS settlement GERMA
Slide 12: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results » Operational performance » Financial results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 12 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 13: 2010 Financial Highlights (1/4)
2010 Financial Highlights (1/4) Operational performance » Revenue at EUR 5,021 M with an organic decrease at -3.5% In € Million FY 2010 FY 2009 ∆% Revenue 5,021 5,127 -2.1% Exchange rates impact 75 Revenue at constant exchange rates 5,021 5,202 -3.5% 13 Full year 2010 Results - Paris, February 16th,
Slide 14: 2010 Financial Highlights (2/4)
2010 Financial Highlights (2/4) Operational performance » Revenue and organic growth per quarter (year on year) -1.2% 1,316 1,264 -3.5% -3.8% 1,231 1,210 -5.5% Q1 Q2 Q3 Q4 14 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 15: 2010 Financial Highlights (3/4)
2010 Financial Highlights (3/4) Full year 2010 Operating Margin evolution » up by +107bp compared to 2009 6.7% 5.7% 7.4% 6.8% 6.0% 4.6% 119 150 175 187 294 337 H1 09 H1 10 H2 09 H2 10 FY 09 FY 10 NB: all figures based at 2010 scope and exchange rates (M€) 15 Full year 2010 Results - Paris, February
Slide 16: 2010 Financial Highlights (4/4)
2010 Financial Highlights (4/4) Financial performance » Operating Margin at EUR 337 M (6.7% of revenue), representing an increase of +107bp compared to 2009 at same scope and exchange rates » OMDA at EUR 532 M, representing 11% of revenue » EUR 65 M of staff restructuring costs as part of the Group
Slide 17: 2010 Performance by service line
2010 Performance by service line Revenue and Operating Margin Revenue Operating Margin Operating Margin % % In EUR M illion FY 2010 FY 2009 FY 2010 FY 2009 FY 2010 FY 2009 growth Managed Services 1,847 1,945 -5.0% 146 104 7.9% 5.3% Systems Integration 1,771 1,859 -4.8% 70 80 4.0% 4.3% HTTS 1,035 991
Slide 18: Managed Services
Managed Services Revenue breakdown by GBU Other » 2010 GCEMA countries UK 12.8% 12.9% 20.9% Benelux France 29.2% 24.2% Revenue and Operating Margin » Two-year comparison FY 2010 FY 2009 % Organic (*) In € Million Revenue 1,847 1,945 -5.0% Operating margin 145.7 103.9 +40.3% Operating margin rate 7.9
Slide 19: System Integration
System Integration Utilization rate Revenue breakdown by GBU » 2010 Other » Evolution by quarter GCEMA Spain countries H1 2009 H2 2009 H1 2010 H2 2010 13.4% 11.2% 9.2% UK 81% 81% 81% 80% 12.2% Benelux 18.1% France 35.9% Revenue and Operating Margin » Two-year comparison FY 2010 FY 2009 % Organic (*)
Slide 20: Hi-Tech Transactional Services
Hi-Tech Transactional Services Spain Revenue breakdown by GBU AWL AWL 2.4% Asia 3.5% Germany Belgium » 2010 30.9% 9.5% Other countries Total UK 2.1% Atos Wordline 8.9% = 83.7% AWL France 42.7% Revenue and Operating Margin » Two-year comparison FY 2010 FY 2009 % Organic (*) In € Million Revenue 1,035
Slide 21: Consulting
Consulting Utilization rate Revenue breakdown by GBU Asia » Evolution by quarter » 2010 Spain 0.6% UK 21.2% H1 2009 H2 2009 H1 2010 H2 2010 24.3% 64% 67% 70% 69% France 18.2% Benelux 35.7% Revenue and Operating Margin » Two-year comparison FY 2010 FY 2009 % Organic (*) In € Million Revenue 208 247 -
Slide 22: Medical BPO
Medical BPO Revenue breakdown by GBU » 2010 UK 100% Revenue and Operating Margin » Two-year comparison FY 2010 FY 2009 % Organic (*) In € Million Revenue 160 159 +0.6% Operating margin 18.5 20.3 -8.7% Operating margin rate 11.6% 12.7% -1.2 pt Headcount at closing (Dec) 1,934 1,880 +2.9% (*) At 2010
Slide 23: 2010 Performance by Global Business Unit
2010 Performance by Global Business Unit Revenue and Operating Margin Total Revenue Operating Margin Operating Margin % In EUR M illion FY 2010 FY 2009 % growth FY 2010 FY 2009 FY 2010 FY 2009 France 1,133 1,128 +0.4% 45 47 3.9% 4.2% Benelux 938 997 -5.9% 92 84 9.9% 8.4% United Kingdom 904 937 -3.5%
Slide 24: Headcount evolution
Headcount evolution Over the year 2010 » Increasing direct staff since May 2010 to stick to the evolution of activity » Decreasing indirect staff as an effect of restructuring to reduce cost base (TOP program) » Hiring: +5,884 new employees +5,884 +416 49,036 -4,874 48,278 -2,184 Opening staff Hirin
Slide 25: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results » Operational performance » Financial results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 25 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 26: Statutory Income statement
Statutory Income statement FY 2009 FY 2009 In € M illion FY 2010 Comparable Statutory Revenue 5,021 5,127 5,127 Operating Margin 337 291 290 % revenue 6.7% 5.7% 5.7% Staff reorganisation (65) (141) (141) Premises offices rationalisation (39) (86) (86) Other operating income and expenses (34) (32) 7
Slide 27: Operating Cash Flow evolution
Operating Cash Flow evolution 2008 2009 2010 Operating Cash Flow (in EUR million) -52 +117 +143 Net debt as of December 31st 2010: EUR 139 million 27 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 28: Cash Flow statement
Cash Flow statement (In EUR Million) FY 2010 FY 2009 OMDA (*) 532 501 Net capital Expenditures (176) (198) Change in working capital 53 35 Cash from Operations 409 338 Taxes paid (61) (40) Net costs of financial debt paid (5) (11) Net interest of convertible bonds (13) (2) Reorganisation (100) (117)
Slide 29: Simplified Balance Sheet
Simplified Balance Sheet 31 Dec 31 Dec 2009 31 Dec 2009 In € Million 2010 Comparable Statutory Goodwill 1,610 1,508 1,508 Intangible assets 76 69 69 Tangible assets 396 407 407 Non-current financial assets 231 220 137 Net Non-current financial instruments -1 -3 -3 Net Deferred tax assets 223 186 147
Slide 30: Credit lines
Credit lines Credit lines of EUR 1.1 B until May 2012 » Atos Origin well below banking covenants: end 2010 end 2009 end 2008 covenant Leverage ratio (net debt / OMDA) 0.26 0.28 0.64 < 2.5 Interest cover ratio (Operating Margin / net cost 19.0 21.5 9.3 >4 of financial debt) 30 Full year 2010 Results
Slide 31: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 31 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 32: In a Post Crisis environment a new area for reinventing the Business Model
In a Post Crisis environment a new area for reinventing the Business Model Technology: Social: » Virtualization and Cloud technologies » Hyper connectivity » Smart Mobility » Virtual communities » Social Business Computing » Sustainable development » Pay-per-use Clients Economics: Financial: » Shift
Slide 33: Strategy designed to develop the segments of the IT services market
Strategy designed to develop the 2 segments of the IT services market » IT services to support customers’ top line growth for their : ENABLING IT Competitive positioning BUSINESS Time to Market Innovation Atos Origin » Atos Origin answers : Industry expertise HTTS portfolio roll out operates IT Key
Slide 34: Dynamics of the strategy
Dynamics of the strategy 2009 2010 2011 2012 2013 Operating Margin Objective: GROUP TRANSFORMATION 7% to 8%, catching up with competitors • ROLL OUT OF HTTS Objective: • DEVELOPMENT OF IT SPECIALIZED BUSINESSES X2 HTTS • INNOVATION • NEW DISTINCTIVE OFFERINGS • TOPLINE GROWTH / CONSOLIDATE MARKET PO
Slide 35: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update » Group transformation » Specialised businesses 5. SIS acquisition follow-up 6. Objectives 2011 35 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 36: 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, and innovate at work 4. Sustainability »Implementation of initiatives to become a leader in Corporate 1. Cost optimization and Responsibility cash manag
Slide 37: TOP Program: cost optimization
TOP Program : cost optimization Non personal cost base reduction » Main items have been: » Maintenance costs reduced by -15% » rental cost of premises reduced by -9% » Marketing/Fees and others expenses by -17% -15% 260 -9% -17% 222 227 214 195 189 -4% -13% 117 112 113 118 93 81 Travel Cars Maintena
Slide 38: Lean management: a key contributor to competitive gains
Lean management: a key contributor to competitive gains » Number of AO Lean experts deployed 220 170 130 Dec 09 Dec 10 Dec 11 16,000 » Cumulated direct staff working under Lean management 9,000 2,800 15 per cent productivity gain expected, and material Delivery Quality increase 38 Full year 2010 Res
Slide 39: Top Sales: best-in-class account planning process
Top Sales: we have implemented a best-in-class account planning process Main achievements in 2010 » 700 accounts have account managers and proper account plans: for all above EUR 5 M yearly revenues, to be updated twice a year » Account manager function defined consistently across GBUs and extended
Slide 40: Showing Leadership in Corporate Responsibility
Showing Leadership in Corporate Responsibility Highly demanding commitment to be “best in class” » 1st IT Company Member of the GRI since 2009 » Member of the UN Global Compact since 2010 » 1st CR Report published in 2010 and qualified by GRI, world de facto reporting standard A zero carbon IT infra
Slide 41: Well Being at Work
Well Being at Work Imagine the new way of working and be recognized as one of the best companies to work for 2010 achievements WbW Ambitions for 2011 » Atos Campus concept to be deployed (Pune, Madrid, Frankfort, Grenoble) WbW as a leverage for SIS » Innovation at work with smart collaborative tools
Slide 42: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update » Group transformation » Specialised businesses 5. SIS acquisition follow-up 6. Objectives 2011 42 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 43: HTTS: first successes and continued focused sales effort
HTTS: first successes and continued focused sales effort 2010 effort focused on building teams, and sales momentum, with a specific effort on closing first new significant deals in Q4 and preparing 2011 priority initiatives Sales activity in Q4 was strong, both on local HTTS activities, and on lever
Slide 44: Pursued effort on sustained portfolio of HTTS leads and opportunities
Pursued effort on sustained portfolio of HTTS leads and opportunities in all countries Spain » Loyalty Programs » Fraud Management » Urban Mobility Applications » M2M » Payment Services UK » IVR Systems » Mobile Applications » Corporate Payment Cards » Wealth Management Solutions » Ticketing Systems
Slide 45: HTTS: actions planned in 2011
HTTS: actions planned in 2011 1. Within Atos in its current scope: » Reinforcement of dedicated sales force in the new geographies » Customization of offerings and specific developments (HTTS Boost Plan) 2. On SIS and with Siemens: Three actions post expected anti-trust clearance » Qualify current t
Slide 46: Atos WorldGrid: a unique ambition
Atos WorldGrid: a unique ambition Providing Business Critical IT for each Utility & Energy actor Ambitious Objectives » Over 1,000 engineers in Europe & BRICs » EUR 150 M revenue today » An anticipated doubling of revenues by 2014 » Among world leaders in smart energy. Encompassing the whole value c
Slide 47: Group Portfolio main achievements
Group Portfolio main achievements Main objective: » Accelerate revenue growth focusing on key differentiators Some good steps forward: » Global Key Offerings (GKO) reached EUR 390 million in 2010 » Innovation press conferences in 2010 to promote new topics such as Cloud, Sustainability, Grid, Smart
Slide 48: Differentiation
Differentiation Vertical Stars 4 dedicated business lines Targeted next steps already operationals as of 2011 Atos Worldline / HTTS Transport Atos WorldGrid Health Medical BPO Major Events (Olympic Games) Horizontal Differentiators Differentiating IT expertise Hot business trends Cloud & Virtualizat
Slide 49: Delivering on our innovation roadmap
Delivering on our innovation roadmap Cloud Computing Smart Utilities Technology Green IT Social 14 January 2010 31 st March 2010 Smart Mobility Social Computing ECM& Collaboration Economic Financial 6 July 2010 7 February 2011 49 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 50: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 50 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 51: Creation of a European champion in IT services
Creation of a European champion in IT services : New company combining Atos Origin and SIS » A “best in class” company in the two major IT domains Reinforce the Business New Enabling services Company through focused partnerships to develop specialized business Leader in jointly with Siemens Europe B
Slide 52: Integration timeline
Integration timeline Dec. 2010 – Feb. 2011 Mid-April 2011 June 2011 early July 2011 Employee Works’ Antitrust Expected council opinion Atos EGM clearance closing (Jan, 13th) • CEO kick-off • All day integration Instigating a top (January 10th) review (March 15th) management • TOP² kick off • Cluster
Slide 53: Integration of SIS is the priority of Atos top management
Integration of SIS is the priority of Atos top management Objectives Means • By closing: • Deal announcement on 15th December -Detailed Integration planning completed • Signing on February 1st, ahead of schedule on 30h June • As of today: - NewCo fully formed on 1st July and -150 people team dedicat
Slide 54: Integration of SIS: initiatives for effective integration
Integration of SIS : 24 initiatives to achieve effective integration and operational efficiency SIS activity will be included in one of these workstreams Integration workstreams TOP2 workstreams I1 • Financial processes T1 TOP² • Global account Plan I2 Sales • Social processes T2 • Project Improveme
Slide 55: Integration of SIS: Weekly governance
Integration of SIS : Weekly governance in place to ensure fast communication and escalation process Meetings Objectives • Steers the integration process Monday Joint Integration • Reviews progress of all topics including: Closing, Siemens Committee with Partnership, Covenants, Internal IT, Integrati
Slide 56: Contents
CONTENTS 1. Full year 2010 Highlights 2. Full year 2010 Results 3. Vision 4. Strategy update 5. SIS acquisition follow-up 6. Objectives 2011 56 Full year 2010 Results - Paris, February 16th, 2011 www.atosorigin.com
Slide 57: Objectives 2011 (1/2)
Objectives 2011 (1/2) (current Atos Origin Scope) Revenue » Considering the outcome from its large customers and an improving economic environment, the Group expects to return to a slight organic growth in 2011. Operating Margin » Operating Margin target is to increase by +50 to +100 basis points in
Slide 58: Objectives 2011 (2/2)
Objectives 2011 (2/2) With consolidation of SIS, expected as of 1 July 2011 (subject to anti-trust clearance and Shareholders’ approval) » As soon as the transaction is completed, the new guidance for the year 2011 will include SIS (6 months expected in the second half of the year) » This guidance i