ATOS :Third quarter 2015 revenue
(Thomson Reuters ONE) -
Revenue up +23% year-on-year at ? 2,708 million
Positive organic growth trend confirmed
Siemens strategic alliance strengthened
IT contract and shareholding extended for the next 5 years
Acquisition project of Unify: a building block in Atos' clients' digital journey
Transformational transaction agreement with Equens anchoring
Worldline leadership in European e-payment services
2015 objectives confirmed
Bezons, November 03, 2015 - Atos, a global leader in digital services, today
announces its third quarter 2015 revenue. Revenue was ? 2,708 million, up +23%
year-on-year. With +0.5% organic growth in Q3 2015, the positive revenue trend
is confirmed for the fourth quarter in a row. Commercial activity was strong in
Q3 with a book to bill ratio of 93% and an order entry totaling ? 2,531 million.
During the third quarter of 2015, the global strategic partnership with Siemens
has been further strengthened. Firstly, the IT contract has been extended with
the minimum committed volumes increased from ? 5.5 billion to ? 8.73 billion for
the period from July 2011 to December 2021. Secondly, the Atos-Siemens Alliance
has been broadened as the two companies explore further opportunities for
collaboration in the fields of advanced data analytics, cyber-security and
device connectivity with a joint innovation investment program that has been
increased from the initial funding of ? 100 million to ? 150 million. Thirdly,
Atos plans to acquire Unify (formerly known as Siemens Enterprise
Communications) which would strengthen Atos' offering in the field of unified
communications. Finally, the Siemens 5-year lock-up period has been extended
until September 30, 2020.
Worldline has reached a transaction agreement with Equens, a prominent European
payment services provider, headquartered in the Netherlands. The contemplated
transaction represents a transformational step for Worldline, fully in line with
the strategy presented at the time of its IPO. The deal will enhance Worldline's
leadership in the payment services industry providing it with a comprehensive
pan-European footprint, with leading positions and offerings in key geographies
and significantly increased scale, with 2015 pro forma revenue increasing by
circa ? 310 million to exceed ? 1.5 billion.
Thierry Breton, Chairman and CEO of Atos, said: "In addition to the third
quarter 2015 revenue which confirms the capability of Atos to sustain positive
organic growth, I am glad to announce several key achievements in the strategic
development of the Group.
I am delighted that Siemens decided to extend its shareholding in Atos for at
least the next five years to support Atos in the journey to create a European
global leader in the IT digital world. After four years of successful
collaboration, Siemens renewed its confidence in Atos through a significant
extended volume of business commitment to support its digital transformation.
I am looking forward to welcoming the Unify employees and their very strong
management who would bring Atos' customers an extended services and software
platforms offering to enhance business performance in their digital journey.
The transaction project with Equens will represent a transformational step for
Worldline, fully in line with its strategy and the ambition of Atos to reinforce
its European leadership in the field of e-payment services. Through this
transaction five large European banks would renew their commercial contracts for
the next 5 years. I welcome the Equens team and its experienced and highly-
skilled experts to the Group.
All these strategic achievements make me fully confident in the strong potential
of our Group to continue delivering value to our clients and shareholders."
Q3 2015 revenue by Service Line
In ? million Q3 2015 Q3 2014* % organic | % yoy
--------------------------------------------------------------------+---------
Managed Services 1,527 1,514 +0.8% | +35.9%
|
Consulting & Systems Integration 774 794 -2.6% | +1.2%
|
Big Data & Cyber-security 113 109 +4.0% | +129.9%
--------------------------------------------------------------------+---------
Total IT Services 2,413 2,417 -0.2% | +24.6%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
Worldline** 294 278 +6.0% | +8.4%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
TOTAL GROUP 2,708 2,695 +0.5% | +22.6%
--------------------------------------------------------------------+---------
* at constant scope and exchange rates
** Worldline reported +5.0% organic growth on a stand alone basis
Managed Services revenue was ? 1,527 million, up +35.9% year-on-year and +0.8%
at constant scope and exchange rates. Organic revenue growth came from the ramp-
up of several large Managed Services contracts in the United Kingdom, mainly in
the Public and Manufacturing sectors, and in "Other Business Units" (Asia-
Pacific, IMEA). North America was almost stable while France and Germany faced
lower volumes, mainly in the Telco and Energy sectors.
Revenue in Consulting & Systems Integration was ? 774 million, up +1.2% year-on-
year and down -2.6% at constant scope and exchange rates. The activity was
strong in Financial Services in most of the geographies and in the Public sector
in Central & Eastern Europe and in France. The situation improved in Germany
thanks to stronger workforce management implemented by the new team. Revenue
grew in France, led by Technology Services and stabilized in Benelux & The
Nordics. The situation was contrasted in the UK with the end of some contracts
and reduction in scope on some application management contract while revenue
grew in other practices.
During the third quarter of 2015, revenue in Big Data & Cyber-security was
? 113 million, representing organic growth of +4.0%. Revenue growth stemmed from
strong activity in France driven by Extreme Computing and the Cyber-security
business. Cyber-security also grew in the UK while order delays from the Swiss
government continued to impact the overall business.
On a standalone basis, Worldline increased its revenue by +5.0%. From a
contributive perspective to Atos, revenue was ? 294 million, up +6.0% compared
to the third quarter of 2014. All Global Business Lines grew organically. In
Merchant Services & Terminals, growth was primarily driven by the Commercial
Acquiring and the Terminal businesses. All divisions in Financial Processing &
Software Licensing were positively oriented, in particular Payment Software
Licensing with significant license sales in Asia and Online Banking Services
thanks to non-card payment transactions. Revenue growth in Mobility & e-
Transactional Services was driven by e-Consumer & Mobility mainly thanks to the
development of Connected Living activities. e-Government collection grew,
benefiting from the ramp-up of digitization projects.
A detailed presentation of Worldline performance during the third quarter of
2015 is available at worldline.com, in the investors section.
Q3 2015 revenue by Business Unit
In ? million Q3 2015 Q3 2014* % organic | % yoy
--------------------------------------------------------------------+---------
North America 489 495 -1.1% | +232.3%
|
United-Kingdom & Ireland 458 448 +2.2% | +8.1%
|
Germany 389 399 -2.6% | -0.1%
|
France 363 354 +2.5% | +21.7%
|
Benelux & The Nordics 253 263 -3.8% | +0.3%
|
Other Business Units 462 458 +0.8% | +8.2%
--------------------------------------------------------------------+---------
Total IT Services 2,413 2,417 -0.2% | +24.6%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
Worldline** 294 278 +6.0% | +8.4%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
TOTAL GROUP 2,708 2,695 +0.5% | +22.6%
--------------------------------------------------------------------+---------
* at constant scope and exchange rates
** Worldline reported +5.0% organic growth on a stand alone basis
By geography, organic revenue evolution in Q3 2015 was much more balanced than
during the first half of 2015. Revenue trend improved in most of the business
units:
* Germany, in both Consulting & Systems Integration, benefiting from the first
positive effects of the strong actions implemented by the new management,
and in Managed Services, thanks to higher volumes with Siemens;
* France, with the materialization of recent large order entry and cross-
selling in Big Data & Cyber-security;
* Worldline, accelerating revenue growth to up +6.0% in Q3 2015 compared to
+3.9% in H1 2015 with a contribution from all three Business Lines;
* North America, thanks to revenue growth on Xerox ITO acquired scope,
compensating the base effect related to the McGraw Hill Education separation
project completed last year;
* Benelux & The Nordics, down by -3.8% after -6.1% in H1 2015;
* "Other Business Units" continued to show slight growth.
Revenue growth in the UK was +2.2% after having benefited from the ramp-up of
public sector contracts in H1 2015 (+11.5%).
Commercial activity
The order entry during the third quarter of 2015 totaled ? 2,531 million, up
+14% year-on-year, representing a book to bill ratio of 93%, higher than usual
for this period of the year.
The commercial activity demonstrated further focus of our go-to-market on large
accounts and digital transformation. Atos signed several large and important
contracts showing consistent coverage of our four priority market segments
(Manufacturing, Retail & Transportation; Financial Services; Telcos, Media &
Utilities; Public & Health) and customer digital transformation challenges.
With the signature of new contracts, ranging from "Data Center in a Box" and
hybrid Cloud to customer experience and app design, Atos further builds its
position as the trusted IT partner for the digital transformation of its
existing customer base. Similarly, more new customer contracts are being signed
with respect to our most advanced digital solutions: Big Data for Utilities,
Cloud for Transportation, Digital Data Center in Health and Finance, or customer
analytics in Entertainment and Leisure.
Most of these contracts leverage the different areas of expertise within the
Group (Big Data, Security, Consulting, Systems Integration, Managed Services,
Canopy or Worldline) in order to propose an end-to-end solution to customers,
from design to operations, answering their business objectives.
In line with this positive evolution of Atos commercial activity, the full
backlog was ? 18.7 billion, representing 1.7 years of revenue. The full
qualified pipeline was ? 5.9 billion, representing 6.3 months of revenue.
Human resources
The total headcount was 92,184 at the end of September 2015, compared to 83,602
at the end of June 2015.
During the third quarter of 2015, the Group workforce has been increased by
9,349 employees, mainly following the acquisition of Xerox ITO. 3,057 employees
were recruited while attrition was 12.1% at Group level and 20.6% in emerging
countries.
Number of staff in offshore countries increased by +44% year-on-year, reaching
24,643 people by the end of September 2015 (including circa 4,000 staff from
Xerox ITO). The majority of the offshore workforce is located in India, the rest
being mainly in Central & Eastern Europe. Offshore for Systems Integration
represented 41% of direct staff in line with the objective to reach 50% by the
end of 2016.
Global strategic partnership with Siemens strengthened including the acquisition
of Unify: a building block in Atos' clients' digital journey
In recent months, Siemens and Atos conducted a strategic review which resulted
in the reinforcement of the sustainability of the global partnership between the
two groups:
A longer term commitment from Siemens as a client of Atos
Since the acquisition of SIS four years ago, Atos has successfully managed the
IT contract with increasing volumes and the implementation of innovative IT
solutions, supporting Siemens to achieve its strategic objectives.
The IT contract signed in July 2011 for a 7-year period has been extended with
minimum committed volumes increased from ? 5.5 billion to ? 8.73 billion for the
period from July 1(st), 2011 to December 31, 2021. In addition to Managed
Services, Application Management and Systems Integration projects initially
contracted, the scope now covers Cloud services, Industrial Data Analytics, and
Cyber-security.
The extension of this contract reinforces the relationship with Siemens as the
largest client of Atos.
Continuing commercial success and enhanced R&D programs of the Alliance
The Atos-Siemens alliance, founded in 2011, has generated many successful
business wins through early engagement and strong collaboration, complementary
offerings and joint investments to create unique solutions. Atos and Siemens
decided to strengthen and expand their alliance. In particular, the two
companies are exploring further opportunities for collaboration in the fields of
advanced data analytics, cyber-security and device connectivity.
The joint innovation investment program has been increased from the initial
? 100 million funding to ? 150 million. Atos and Siemens developed a pre-
configured analytics platform providing a unique competitive advantage to their
customers to accelerate their digital transformation, especially in the field of
smart data.
Acquisition of Unify project: a building block in Atos' clients' digital journey
Unify provides integrated communications software and services, unifying voice
and data, and generates ? 1.2 billion revenue, of which broadly two thirds in
services and one third in software and platforms that enhance unified social
collaboration, digital transformation, and business performance. Leveraging over
3,000 patents and ? 100 million R&D per annum, Unify technologies would expand
Atos offerings.
The transaction implies a moderate cash consideration for Atos of ? 340 million
to acquire 100% of Unify. Net debt is expected to be ? 50 million and the
pension deficit at circa ? 200 million at closing. In order to generate the
expected costs savings by 2017 (? 130 million), Unify will complete its current
? 267 million restructuring plan. In addition, Unify has been considering ? 103
million for further restructuring which would be fully provisioned at closing
and cash funded by the sellers. Atos could benefit of potential cash tax savings
of circa ? 250 million, notably from a significant amount of Tax Losses Carried
Forward.
A longer term commitment from Siemens as a shareholder of Atos
Siemens is the largest shareholder of Atos with 12.5 million of shares
representing 12% of the current capital of Atos. Further to the strategic
review, the minimum shareholding period which was due to end on June 30, 2016
has been extended until September 30, 2020 (i.e. an additional 4 years and 3
months).
The extension of this commitment reinforces the long-term relationship with
Siemens as the largest shareholder of Atos.
Worldline intends to join forces with Equens to strengthen its pan-European
leadership in payment services
Worldline announced that it has reached a transaction agreement with Equens, a
prominent European payment services provider, headquartered in the Netherlands.
The transaction would represents a transformational step for Worldline, fully in
line with the strategy presented at the time of its IPO, and is expected to
generate a significant increase in scale for Worldline, adding an estimated
? 310 million and ? 39 million to Worldline 2015 revenue and OMDA, respectively.
The Financial Processing activities of the two groups would be merged into a
joint-company to be owned at 63.6% by Worldline and 36.4% by the current Equens
shareholders. Through the newly established Equens Worldline Company, Worldline
Group would strengthen its European leadership in card-based payment services
and would benefit from Equens expertise in SEPA mass-payment systems and
Automated Clearing House (ACH).
In addition, Worldline would acquire the Equens' Merchant Acquiring subsidiary,
PaySquare, for ? 72 million in cash. The PaySquare business would be directly
integrated in Worldline Merchant Services & Terminals Global Business Line.
Worldline would benefit from PaySquare strong positions in merchant services in
Benelux and in cross-border acquiring (Netherlands, Belgium, Germany, Poland.),
resulting in more integrated and comprehensive omni-channels offers.
High value creation is expected to be delivered thanks to detailed synergy plans
to be implemented. Very significant cost synergies of circa ? 40 million are
expected to be reached in 2018, half of which will be delivered as soon as 2017
based on infrastructure rationalization, G&A, procurement and real estate
optimization, as well as revenue expansion through complementary and highly
innovative offerings. An application platforms convergence roadmap would be
engaged with the key clients to progressively generate additional cost saving.
The transaction is expected to close during the first half of 2016, subject to
work councils' information and consultation processes in Worldline and Equens,
banking regulatory authorities and antitrust authorities' approvals.
2015 objectives
The Group confirms all its objectives for 2015 as raised in the H1 release in
July. The figures below include Xerox ITO contribution from July 1(st), 2015:
Revenue
The Group targets a positive revenue organic growth.
Operating margin
The Group has the objective to improve its operating margin rate targeting 8.0%
to 8.5% of revenue.
Free cash flow
The Group expects to generate a free cash flow of circa ? 420 million.
Conference call
Today, Tuesday November 03, 2015, Atos' Chairman and CEO, Thierry Breton;
together with Charles Dehelly, Group Senior Executive Vice President in charge
of Global Operations; Michel-Alain Proch, Group Senior Executive Vice President
and CEO North America Operations; Elie Girard, Chief Financial Officer; and
Patrick Adiba, Chief Commercial Officer, will comment on Atos' 2015 third
quarter 2015 revenue and answer questions from the financial community during a
conference call in English starting at 6:00 pm (CET - Paris).
The conference will be webcasted on atos.net, in the Investors section.
You can also join the conference by telephone:
Dial-in: France +33 1 76 77 22 22
UK +44 20 3427 1909
US + 1 646 254 3365
Pin code: 6068453
Contacts
Investor Relations: Gilles Arditti +33 1 73 26 00 66
gilles.arditti(at)atos.net
Benoit d'Amécourt +33 1 73 26 02 27
benoit.damecourt(at)atos.net
Press: Caroline Crouch +44 77 333 100 86
caroline.crouch(at)atos.net
Forthcoming event
February 24, 2016 Full year 2015 results
Appendix
Q3 2015 revenue by Market
In ? million Q3 2015 Q3 2014* % organic |
-------------------------------------------------------------------------+
Manufacturing, Retail & Transportation 980 973 +0.8%
Public & Health 743 702 +5.8%
Telcos, Media & Utilities 511 557 -8.3%
Financial Services 474 463 +2.4%
--------------------------------------------------------------------------
TOTAL GROUP 2,708 2,695 +0.5%
--------------------------------------------------------------------------
* at constant scope and exchange rates
9 months revenue by Service Line
In ? million 9M 2015 9M 2014* % organic | % yoy
--------------------------------------------------------------------+---------
Managed Services 4,015 3,982 +0.8% | +23.1%
|
Consulting & Systems Integration 2,385 2,446 -2.5% | +5.2%
|
Big Data & Cyber-security 384 368 +4.1% | +679.4%
--------------------------------------------------------------------+---------
Total IT Services 6,784 6,796 -0.2% | +21.6%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
Worldline** 865 827 +4.6% | +7.3%
--------------------------------------------------------------------+---------
|
--------------------------------------------------------------------+---------
TOTAL GROUP 7,649 7,623 +0.3% | +19.8%
--------------------------------------------------------------------+---------
* at constant scope and exchange rates
** Worldline reported +4.4% organic growth on a stand alone basis
9 months revenue by Business Unit
In ? million 9M 2015 9M 2014* % organic | % yoy
--------------------------------------------------------------------+--------
United-Kingdom & Ireland 1,453 1,341 +8.4% | +17.5%
|
France 1,187 1,178 +0.8% | +47.9%
|
Germany 1,148 1,223 -6.1% | -2.2%
|
Benelux & The Nordics 768 811 -5.3% | +2.1%
|
North America 829 863 -3.9% | +89.0%
|
Other Business Units 1,398 1,380 +1.3% | +18.9%
--------------------------------------------------------------------+--------
Total IT Services 6,784 6,796 -0.2% | +21.6%
--------------------------------------------------------------------+--------
|
--------------------------------------------------------------------+--------
Worldline** 865 827 +4.6% | +7.3%
--------------------------------------------------------------------+--------
|
--------------------------------------------------------------------+--------
TOTAL GROUP 7,649 7,623 +0.3% | +19.8%
--------------------------------------------------------------------+--------
* at constant scope and exchange rates
** Worldline reported +4.4% organic growth on a stand alone basis
9 months revenue by Market
In ? million 9M 2015 9M 2014* % organic |
-------------------------------------------------------------------------+
Manufacturing, Retail & Transportation 2,578 2,622 -1.7%
Public & Health 2,180 1,995 +9.3%
Telcos, Media & Utilities 1,532 1,633 -6.2%
Financial Services 1,359 1,373 -1.0%
--------------------------------------------------------------------------
TOTAL GROUP 7,649 7,623 +0.3%
--------------------------------------------------------------------------
* at constant scope and exchange rates
Revenue at constant scope and exchange rates reconciliation
In ? million Q3 2015 Q3 2014 % change
-----------------------------------------------------------------------------
Statutory revenue 2,708 2,209 +22.6%
Scope effect 399
Exchange rates effect 87
Revenue at constant scope and exchange rates 2,708 2,695 +0.5%
-----------------------------------------------------------------------------
Net scope effect amounted to ?+399 million and was related to the acquisitions
of Bull (France, August 2014) and Xerox ITO (North America, June 2015) combined
with the outsourcing of on-site services activities in France (France, March
2015) and the early termination of the Work Capability Assessment BPO contract
with the Department for Work and Pensions (United Kingdom, March 2015).
Exchange rates effect on revenue amounted to ?+87 million mainly resulting from
the British pound and the US dollar strengthening versus the euro.
About Atos
Atos SE (Societas Europaea) is a leader in digital services with 2014 pro forma
annual revenue of circa ? 11 billion and 93,000 employees in 72 countries.
Serving a global client base, the Group provides Consulting & Systems
Integration services, Managed Services & BPO, Cloud operations, Big Data &
Cyber-security solutions, as well as transactional services through Worldline,
the European leader in the payments and transactional services industry. With
its deep technology expertise and industry knowledge, the Group works with
clients across different business sectors: Defense, Financial Services, Health,
Manufacturing, Media, Utilities, Public sector, Retail, Telecommunications, and
Transportation.
Atos is focused on business technology that powers progress and helps
organizations to create their firm of the future. The Group is the Worldwide
Information Technology Partner for the Olympic & Paralympic Games and is listed
on the Euronext Paris market. Atos operates under the brands Atos, Atos
Consulting, Atos Worldgrid, Bull, Canopy, and Worldline.
For more information, visit: atos.net.
Disclaimers
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 risks and
uncertainties are linked to factors out of the control of the Company and not
precisely estimated, such as market conditions or competitors behaviors. Any
forward-looking statements made in this document are statements about Atos'
beliefs and expectations and should be evaluated as such. Forward-looking
statements include statements that may relate to Atos' plans, objectives,
strategies, goals, future events, future revenues or synergies, or performance,
and other information that is not historical information. Actual events or
results may differ from those described in this document due to a number of
risks and uncertainties that are described within the 2014 Registration Document
filed with the Autorité des Marchés Financiers (AMF) on April 1(st), 2015 under
the registration number: D15-0277 and its update filed with the Autorité des
Marchés Financiers (AMF) on August 7, 2015 under the registration number: D.
15-0277-A01. Atos does not undertake, and specifically disclaims, any obligation
or responsibility to update or amend any of the information above except as
otherwise required by law. This document does not contain or constitute an offer
of Atos' shares for sale or an invitation or inducement to invest in Atos'
shares in France, the United States of America or any other jurisdiction.
Revenue organic growth is presented at constant scope and exchange rates.
Business Units include Germany, France, United-Kingdom & Ireland, Benelux & The
Nordics (BTN: The Netherlands, Belgium, Luxembourg, Denmark, Finland, Sweden,
and Estonia), Worldline, North America (USA and Canada), and Other Business
Units including Central & Eastern Europe (CEE: Austria, Bulgaria, Croatia,
Cyprus, Czech Republic, Greece, Hungary, Italy, Lithuania, Poland, Romania,
Russia, Serbia, Slovakia, Slovenia, Switzerland and Turkey), Iberia (Spain,
Portugal, and Andorra), Asia-Pacific (Australia, China, Hong Kong, Indonesia,
Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and
Thailand), Latin America (Brazil, Argentina, Mexico, Colombia, Chile, Guatemala,
Jamaica, Peru, and Uruguay), India, Middle East & Africa (IMEA: Algeria, Benin,
Burkina Faso, Egypt, Gabon, Israel, India, Ivory Coast, Lebanon, Madagascar,
Mali, Mauritius, Morocco, Qatar, Saudi Arabia, Senegal, South Africa and UAE),
Major Events, and Cloud & Enterprise Software.
ATOS Third quarter 2015 revenue:
http://hugin.info/143359/R/1963849/716681.pdf
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GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ATOS via GlobeNewswire
[HUG#1963849]
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