First quarter of 2020 – Atos

A resilient profile and a strong balance sheet to deal with an unprecedented problem

Income at € two,834 million

-.eight% organic expansion

Reserve to bill ratio at 103%

Renewals of big contracts in North The usa

Proper business mix to aid consumers in Covid-19 context

Important value actions getting carried out to safeguard operating margin

SPRING transformation application to an Field tactic effectively on monitor

Update of 2020 aims post Covid-19

Paris, April 22, 2020,

Atos, a international leader in digital transformation, these days announces the income of its very first quarter of 2020.

Elie Girard, CEO, claimed: “In this unprecedented atmosphere wherever uncertainty prevails, our very first precedence has been to safeguard our workers when supplying total continuity of services to our customers. The Team is solidly positioned to navigate easily by the disaster thanks to deep client interactions across all industries, a resilient business mix and a strong balance sheet that delivers a strong financial adaptability.

Our a hundred and ten,000 colleagues across the earth have provided an fast and superb reaction to customers’ problems and need to have for aid by our “Always Ready” application designed already due to the fact the commencing of the 12 months. Now our minds and endeavours are turning to the post-Covid periods, actively making ready for the “new normal” which will see an acceleration in precise customers’ requires, specifically facts platforms, cybersecurity, cloud migration, digital workplace and decarbonization.

We revise these days our aims for 2020 demonstrating the resilience of the Team and the willingness to share any affect reasonably across stakeholders. I am certain that Atos will emerge from this international disaster much better than ever and ready to go ahead to the following step.”

Q1 2020 revenue was € 2,834 million, down -.eight% organically. In the context of Covid-19 disaster and restrictions and lockdowns in March in most of the international locations wherever the Team operates, income lessened only a bit thanks to the resilient profile of its firms based mostly on multi-12 months contracts combined with its strong business in Huge Info and Cybersecurity. Furthermore, and in spite of the disaster, the Team accelerated its industrial dynamism with purchase entry at € 2,908 million main to a book to bill ratio of 103%, appreciably up when compared to final 12 months at 86%.

Q1 2020 income functionality by Field

Manufacturing achieved € 539 million of income, down -two.nine% at continuous scope and trade premiums. The Field benefitted from a excellent functionality in Automotive with the ramp-up of a German car or truck organization and Rheinmetall on facts management contracts, compensating the affect in Daimler owing to Covid-19 and the ramp down of PSA. Conversely, Manufacturing was impacted by lower volumes with Siemens, a slowdown in the Aerospace sector owing to Covid-19, and quite a few shifts of devices sales to the conclusion of the quarter.

Financial Providers & Insurance plan income was € 527 million in the very first quarter 2020, down by -two.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as effectively as the growth of action with a payment organization in France which have far more than compensated for the reduction of volumes from banking establishments in Central Europe. Increasing marketplaces experienced from non-recurring sales carried out final 12 months in APAC and Center East & Africa. In North The usa, venture based mostly functions reduce already noticed in past quarters was accelerated in March owing to decisions from quite a few Financial Providers corporations to postpone or lower discretionary fees in the context of Covid-19.

Public Sector & Protection income was € 584 million, up +3.two% at continuous scope and trade premiums. The expansion was pushed by the strong functionality recorded in Northern Europe, thanks to the continuation of the deal with European Middle for Medium range Weather forecast as effectively as with EU Lisa and smart facts platform in Benelux. North The usa obtained stability irrespective of lower volumes, thanks to extra sales on present contracts. The problem was far more hard in Southern Europe, impacted by the ramp-down of Large Effectiveness Computing action as effectively as non-recurring sales carried out final 12 months. Central Europe was negatively impacted by lower volumes, and lastly Increasing Marketplaces was impacted by income recorded final 12 months for the Tokyo Olympic Video games planning and not recurring this 12 months.

Telecom, Media & Technology achieved € 443 million, up +.eight% organically, with a contrasted functionality by geography and by action. Large Tech & Technology posted a strong expansion, pushed by Unified Interaction & Collaboration choices in Central Europe, sustained by organic expansion of recently acquired organization Maven Wave in North The usa and deal ramp-up with a significant spouse, as effectively as extra sales in Southern Europe. Media increased as effectively, benefitting from new business growth, coupled with greater volumes with present consumers in North The usa. Telecom action was primarily impacted by some ramp-downs in Southern Europe.

Income in Methods & Providers achieved € 418 million and increased by +.4% organically. Organization in Electricity & Utilities sector fueled the expansion. In individual, the Field sent a Large Effectiveness Computer system in South The usa. Electronic workplace solutions ramped-up with a big Electricity service provider in North The usa and with Nationwide Grid in Northern Europe. The problem in Retail, Transportation & Hospitality sectors was far more hard in the context of Covid-19. In fact, when the ramp-up of a new IoT deal signed in the region of predictive routine maintenance benefitted to North The usa, the Field faced volume reductions in Europe.

Health care & Daily life Sciences income was € 323 million, down by -4.nine% when compared to Q1 2019, impacted by volume reductions on really precise contracts in equally North The usa and Northern Europe, when the industry benefitted from the ramp-up of a international deal with Bayer and a digital workplace deal signed final 12 months in Central Europe, and the ramp-up of an Australian Public Company deal in Increasing Marketplaces. Southern Europe benefitted from a strong action in digital jobs and Large Effectiveness Computing.

Q1 2020 income functionality by Regional Organization Device

The very first quarter of 2020 showed unique income evolution by Regional Organization Units which can be summarized as follows:

• In North The usa, income achieved € 681 million, lowering by -two.6% organically primarily coming from Covid-19 triggered venture stops and volume reductions in quite a few Industries. The Organization Device obtained expansion in Telecom, Media & Technology and Methods & Providers thanks to new logo, greater volumes and ramp up of present contracts
• In Northern Europe, income was approximately stable at € 698 million. Solid business was recorded in Public Sector & Protection primarily led by the continuation of the HPC deal with European Centre for Medium Variety Weather Forecast, as effectively as by deliveries to European Union Institutions. Telecom, Media & Technology and Manufacturing faced some contracts ending and Health care & Daily life Sciences a reduction on Organization Course of action Outsourcing contracts
• In Southern Europe, income achieved € 594 million, lowering by -two.6% Health care & Daily life Sciences posted a double-digit expansion thanks to digital jobs sent and Large Effectiveness Computing functions. The geography was impacted by non-recurring sales also on Large Effectiveness Computing functions carried out final 12 months in quite a few Industries
• In Central Europe, the geography increased organically by +one.% main to a € 667 million Manufacturing benefitted from quite a few ramp-up of infrastructure contracts and extra jobs. Income in Telecom, Media & Technology also increased, pushed by Unified Interaction & Collaboration business. Health care & Daily life Sciences posted a double-digit expansion primarily fueled by new contracts. Public Sector & Protection was impacted by non-recurring sales and jobs obtained final 12 months when new jobs in SAP HANA and in Electronic have been carried out in Germany and in Austria. Lastly, Methods & Providers was impacted by a lower demand in Unify Interaction channels
• Increasing Marketplaces achieved € 194 million income, +one.% Manufacturing posted a strong expansion, pushed by a greater stage of sales as effectively as much better demand in digital jobs primarily in Asia-Pacific and South The usa. Income in Resource & Providers strongly increased fueled by Large Effectiveness Computing action in South The usa when the problem was far more hard in Financial Providers primarily in Asia Pacific.

Q1 2020 income functionality by Division

In Infrastructure & Info Management (IDM), income was € 1,558 million, -.five% organically. The Division ongoing to roll-out its transformation model by extending Hybrid Cloud Orchestration as effectively as expanding Electronic Office implementation.

The precise problem owing to Covid-19 pandemic necessary a strong business continuity for significant infrastructures for its consumers. In fact, the Division recorded a strong demand on Electronic Office solutions (accessing applications from any where), organization interaction choices with Unified Collaboration & Interaction, network connections, and many others. These functions are joined to the distant functioning that has been put in area by a great deal of firms to deal with the lockdown and sustain their action.

Lastly, in the latest context, the Division recorded significantly less income generated by devices sales and fertilization in present contracts in March.

In Organization & System Alternatives (B&PS) income was € 1,016 million, -4.nine% organically. As a reminder, the Division was down -one.two% in This autumn 2019 owing to the headwinds in Financial Providers in North The usa as effectiv
ely as in Automotive industry in Germany, and hence did not assume any enhancement in the commencing of 2020 even ahead of Covid-19.

In the new context of Covid-19, the Division had to deal with a slowdown in most of the Industries. In fact, this business section is considerably far more dependent from the cycle and consumers began in March to postpone discretionary jobs. The Team considers that the most impacted functions will be Technology Skilled Providers necessitating engineers functioning on purchaser sites, that can’t be carried out on a distant manner (circa thirty% of Organization & System Alternatives income). On the reverse, Application Development and Upkeep, based mostly on extended expression contracts must be resilient (circa forty% of Organization & System Alternatives income). In between, a significant part of significant Electronic Jobs (circa thirty% of Organization & System Alternatives income) can be carried out on a distant manner, but the volume of the business will depend in the following months from the purchaser needs on new jobs.

The business in Huge Info & Cybersecurity (BDS) remained strong with income up +16.3% organically at € 259 million in the very first quarter of 2020. In the latest context, the distant functioning as effectively as the maximize of cyberattacks led firms to strengthen the protection of their infrastructure and facts. As examples, consumers asked for far more solutions of identification in speedy manner, and consulting on the solidity of their protection infrastructure.

In Huge Info, there was no discontinuity in the provide chain thanks to professional-active inventory management. The demand stays strong in Large Effectiveness Computing. As an instance, distant access to SAP HANA involves extra processing ability and hence greater requires of Sequana S in-memory servers. Lastly, Mission Critical Technique business also recorded a high income expansion.

Professional action

In the course of the very first quarter of 2020, the Team purchase entry achieved € 2,908 million symbolizing a Reserve to Invoice ratio of 103%, when compared to 86% obtained about the exact interval final 12 months.

The major new contracts signed about the interval have been notably in North The usa with a significant American organization in Protection Sector (Telecom, Media & Technology), in Central Europe with Norddeutsche Landesbank (Financial Providers & Insurance plan) and a international european pharmaceutical organization (Health & Daily life Sciences) and in Southern Europe with a big utility in France and with Ile-de-France Mobilités (Methods & Providers), as effectively as with a French banking institution (Financial Providers & Insurance plan).

Deal renewals of the quarter integrated significant signatures with notably the very first part of the renewal of Texas Section of Data Methods deal (Public Sector & Protection), the renewal of Conduent deal (Telecom, Media & Technology) in North The usa, a deal with a Worldwide European firm in money goods for SAP HANA (Manufacturing) in Central Europe, as effectively as with the French UGAP (Public Sector & Protection) in Southern Europe.

In line with this dynamic industrial action, the total backlog amounted to € 22.one billion at the conclusion of March 2020, symbolizing one.nine 12 months of income. The total qualified pipeline achieved € 7.6 billion, symbolizing 7.eight months of income.

Human assets

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

In the very first quarter of 2020, the Team hired five,043 staff members, primarily in offshore international locations.

How Atos handles Covid-19 affect

Given that conclusion of January, the Team management, supported by Team Human Methods, has been focusing on the overall health and security of workers when making sure a proper implementation of pre-outlined business continuity ideas in every Division.

The Team also activated the “Always Ready” application, pulling together all Team solutions especially adapted to this distressed problem and getting proactively available to consumers to assist them go by the disaster: aid to generalized homeworking like collaboration options, precise aid to community & overall health establishments, reinforcement of cybersecurity protections, and many others. Customers’ suggestions and fulfillment with regards to Atos groups reactivity has been overwhelmingly good. Atos is also concerned into several governmental jobs across the earth to battle versus the virus, and prepare the progressive reduction of restrictions and lockdowns.

To safeguard its operating margin, the Team has taken strong actions on its value base in the pursuing parts:

• Solid centralized checking of personnel costs (choosing freeze, cancellation of salary raises, affect on variable payment, holidays, and many others.)
• Alternative of subcontractors by individual freed up staff members
• Cancellation of non purchaser related discretionary fees
• Solid saving application on non personnel costs.

In whole, the Team introduced a application symbolizing a whole amount of c. 400 million euros of cost savings in 2020.

Up to date 2020 aims post Covid-19

As the 2020 aims disclosed on February 19, 2020 have been pre Covid-19 result, the Team updates these days its three aims for the total 12 months 2020, based mostly on the latest macroeconomic circumstance of a progressive restoration about H2 2020 and 2021, as effectively as the management’s daily conversations with Team consumers:

• Income organic evolution: between -two% and -4% (as opposed to c. +two% pre Covid-19)
• Functioning margin level: nine% to nine.five% of income (as opposed to +twenty bps to + forty bps earlier mentioned 2019 (10.3% claimed) pre Covid-19)
• Absolutely free money move: € .five billion to € .6 billion (as opposed to c. € .7 billion pre Covid-19)[*].

The Team suspends its targets for 2021, the final 12 months of the three-12 months plan offered at the Trader Working day held on January thirty, 2019. The Team will present its eyesight as effectively as its mid-expression targets at the 2020 Analyst Working day (day to be rescheduled).

Postponement of Annual Normal Meeting and remarkable cancellation of dividend payment in 2020

Thanks to the remarkable circumstances joined to the Covid-19, the Board of Administrators, which fulfilled on March 31, 2020, has resolved to postpone the Annual Normal Meeting to begin with scheduled on May well 14, 2020 to June 26, 2020.

In these unprecedented circumstances, through its session on April 21, 2020, the Board of Administrators took the remarkable determination not to suggest the one.forty euro for every share dividend which was to begin with regarded to be submitted to the Annual Normal Meeting. In addition, the Main Govt Officer as effectively as other members of the Normal Management Committ
ee have resolved to lower by thirty% their payment through the latest three-month interval from March to May well 2020. The Chairman of Atos’ Board of Administrators has built the exact determination.

The Team confirms that the cancellation of the dividend this 12 months is an exception to its dividend coverage with a fork out-out ratio between 25% and thirty% of Web profits Team share.

Appendix

Income at continuous scope and trade premiums reconciliation

Scope results amounted to €+14 million for income and are primarily related to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+eighteen million), the acquisition of IDnomic, consolidated as of Oct one, 2019 (3 months for €+4 million), the acquisition of X-PERION, consolidated as of December one, 2019 (3 months for €+two million), the disposal of some precise Unified Interaction & Collaboration functions generally in Q1 2020 (whole restatement of €-4 million) as effectively as former ITO functions in the Uk commencing of H2 2019 (3 months for €-4 million), and lastly the disposal and decommissioning of non-strategic functions within CVC.

Currency trade premiums results generally arrived from the American greenback as effectively as the British pound and positively contributed to income for €+26 million.

Meeting connect with

Now, Wednesday, April 22, 2020, the Team will hold a conference connect with in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in purchase to comment on Atos’ Q1 2020 income and response queries from the financial local community.

You can sign up for the webcast of the conference:

• on internet, in the Traders area
• by smartphones or tablets by the scan of:
• by telephone with the dial-in, five-10 minutes prior the beginning time:
  • France             +33 one 70 70 07 81       code 12652364
  • Germany             +forty nine sixty nine 2222 2625       code 12652364
  • Uk             +forty four 844 481 9752       code 12652364
  • US             +one 646 741 3167         code 12652364
  • Other international locations +forty four 2071 928338        code 12652364

Immediately after the conference, a replay of the webcast will be accessible on atos.internet, in the Traders area.

Forthcoming activities

June 26, 2020              Annual Normal Meeting

July 27, 2020               Very first fifty percent 2020 effects

Oct 22, 2020         3rd quarter 2020 income

To be scheduled            2020 Analyst Working day