First quarter of 2020 – Atos

A resilient profile and a powerful harmony sheet to encounter an unprecedented problem

Profits at € 2,834 million

-.8% organic and natural development

Guide to invoice ratio at 103%

Renewals of key contracts in North America

Correct organization blend to aid buyers in Covid-19 context

Required cost actions currently being carried out to secure operating margin

SPRING transformation software to an Business solution effectively on monitor

Update of 2020 goals write-up Covid-19

Paris, April 22, 2020,

Atos, a international chief in electronic transformation, right now announces the profits of its 1st quarter of 2020.

Elie Girard, CEO, reported: “In this unprecedented environment exactly where uncertainty prevails, our 1st precedence has been to secure our employees while giving comprehensive continuity of service to our consumers. The Group is solidly positioned to navigate effortlessly by way of the crisis thanks to deep consumer relationships throughout all industries, a resilient organization blend and a sturdy harmony sheet that offers a powerful monetary overall flexibility.

Our a hundred and ten,000 colleagues throughout the earth have offered an speedy and remarkable response to customers’ challenges and require for aid by way of our “Always Ready” software made now due to the fact the beginning of the 12 months. Now our minds and endeavours are turning to the write-up-Covid situations, actively preparing for the “new normal” which will see an acceleration in unique customers’ wants, particularly knowledge platforms, cybersecurity, cloud migration, electronic office and decarbonization.

We revise right now our goals for 2020 demonstrating the resilience of the Group and the willingness to share any impact pretty throughout stakeholders. I am certain that Atos will arise from this international crisis much better than ever and ready to shift ahead to the up coming phase.”

Q1 2020 revenue was € 2,834 million, down -.8% organically. In the context of Covid-19 crisis and limitations and lockdowns in March in most of the nations exactly where the Group operates, profits reduced only marginally thanks to the resilient profile of its corporations centered on multi-12 months contracts combined with its strong organization in Major Knowledge and Cybersecurity. Additionally, and in spite of the crisis, the Group accelerated its professional dynamism with get entry at € 2,908 million major to a ebook to invoice ratio of 103%, considerably up when compared to very last 12 months at 86%.

Q1 2020 profits general performance by Business

Production arrived at € 539 million of profits, down -2.nine% at regular scope and trade fees. The Business benefitted from a fantastic general performance in Automotive with the ramp-up of a German auto corporation and Rheinmetall on knowledge management contracts, compensating the impact in Daimler thanks to Covid-19 and the ramp down of PSA. Conversely, Production was impacted by lessen volumes with Siemens, a slowdown in the Aerospace sector thanks to Covid-19, and numerous shifts of products profits in the direction of the stop of the quarter.

Economic Companies & Insurance coverage profits was € 527 million in the 1st quarter 2020, down by -2.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as effectively as the growth of activity with a payment corporation in France which have additional than compensated for the reduction of volumes from banking institutions in Central Europe. Developing markets experienced from non-repeated profits executed very last 12 months in APAC and Center East & Africa. In North America, job centered routines lower now observed in previous quarters was accelerated in March thanks to selections from numerous Economic Companies companies to postpone or lower discretionary expenditures in the context of Covid-19.

General public Sector & Protection profits was € 584 million, up +3.2% at regular scope and trade fees. The development was pushed by the powerful general performance recorded in Northern Europe, thanks to the continuation of the contract with European Centre for Medium vary Weather forecast as effectively as with EU Lisa and sensible knowledge platform in Benelux. North America achieved security regardless of lessen volumes, thanks to extra profits on present contracts. The problem was additional hard in Southern Europe, impacted by the ramp-down of Superior Overall performance Computing activity as effectively as non-repeated profits executed very last 12 months. Central Europe was negatively impacted by lessen volumes, and lastly Developing Marketplaces was impacted by profits recorded very last 12 months for the Tokyo Olympic Online games preparation and not repeated this 12 months.

Telecom, Media & Technologies arrived at € 443 million, up +.8% organically, with a contrasted general performance by geography and by activity. Superior Tech & Technologies posted a powerful development, pushed by Unified Interaction & Collaboration choices in Central Europe, sustained by organic and natural development of recently acquired corporation Maven Wave in North America and contract ramp-up with a big companion, as effectively as extra profits in Southern Europe. Media greater as effectively, benefitting from new organization growth, coupled with higher volumes wi
th present buyers in North America. Telecom activity was mostly impacted by some ramp-downs in Southern Europe.

Profits in Assets & Companies arrived at € 418 million and greater by +.four% organically. Enterprise in Vitality & Utilities sector fueled the development. In particular, the Business delivered a Superior Overall performance Pc in South America. Electronic office services ramped-up with a key Vitality provider in North America and with Countrywide Grid in Northern Europe. The problem in Retail, Transportation & Hospitality sectors was additional hard in the context of Covid-19. Certainly, while the ramp-up of a new IoT contract signed in the region of predictive servicing benefitted to North America, the Business faced quantity reductions in Europe.

Health care & Lifetime Sciences profits was € 323 million, down by -four.nine% when compared to Q1 2019, impacted by quantity reductions on pretty unique contracts in both of those North America and Northern Europe, while the industry benefitted from the ramp-up of a international contract with Bayer and a electronic office contract signed very last 12 months in Central Europe, and the ramp-up of an Australian General public Company contract in Developing Marketplaces. Southern Europe benefitted from a powerful activity in electronic initiatives and Superior Overall performance Computing.

Q1 2020 profits general performance by Regional Enterprise Unit

The 1st quarter of 2020 confirmed distinctive profits evolution by Regional Enterprise Models which can be summarized as follows:

• In North America, profits arrived at € 681 million, lowering by -2.6% organically mostly coming from Covid-19 triggered job stops and quantity reductions in numerous Industries. The Enterprise Unit achieved development in Telecom, Media & Technologies and Assets & Companies thanks to new emblem, higher volumes and ramp up of present contracts
• In Northern Europe, profits was about secure at € 698 million. Sturdy organization was recorded in General public Sector & Protection mostly led by the continuation of the HPC contract with European Centre for Medium Array Weather Forecast, as effectively as by deliveries to European Union Establishments. Telecom, Media & Technologies and Manufacturing faced some contracts ending and Health care & Lifetime Sciences a reduction on Enterprise Method Outsourcing contracts
• In Southern Europe, profits arrived at € 594 million, lowering by -2.6% Health care & Lifetime Sciences posted a double-digit development thanks to electronic initiatives delivered and Superior Overall performance Computing routines. The geography was impacted by non-repeated profits also on Superior Overall performance Computing routines executed very last 12 months in numerous Industries
• In Central Europe, the geography greater organically by +1.% major to a € 667 million Production benefitted from numerous ramp-up of infrastructure contracts and extra initiatives. Profits in Telecom, Media & Technologies also greater, pushed by Unified Interaction & Collaboration organization. Health care & Lifetime Sciences posted a double-digit development mostly fueled by new contracts. General public Sector & Protection was impacted by non-repeated profits and initiatives achieved very last 12 months while new initiatives in SAP HANA and in Electronic were being executed in Germany and in Austria. Lastly, Assets & Companies was impacted by a lessen demand from customers in Unify Interaction channels
• Developing Marketplaces arrived at € 194 million profits, +1.% Production posted a strong development, pushed by a higher stage of profits as effectively as much better demand from customers in electronic initiatives mostly in Asia-Pacific and South America. Profits in Resource & Companies strongly greater fueled by Superior Overall performance Computing activity in South America while the problem was additional hard in Economic Companies mostly in Asia Pacific.

Q1 2020 profits general performance by Division

In Infrastructure & Knowledge Administration (IDM), profits was € 1,558 million, -.5% organically. The Division continued to roll-out its transformation product by extending Hybrid Cloud Orchestration as effectively as raising Electronic Office implementation.

The unique problem thanks to Covid-19 pandemic needed a strong organization continuity for essential infrastructures for its buyers. Certainly, the Division recorded a powerful demand from customers on Electronic Office options (accessing applications from everywhere), company communication choices with Unified Collaboration & Interaction, network connections, and so on. These routines are joined to the remote working that has been put in area by a whole lot of companies to encounter the lockdown and manage their activity.

Lastly, in the present-day context, the Division recorded a lot less profits created by products profits and fertilization in present contracts in March.

In Enterprise & Platform Solutions (B&PS) profits was € 1,016 million, -four.nine% organically. As a reminder, the Division was down -1.2% in Q4 2019 thanks to the headwinds in Economic Companies in North America as effectively as in Automotive industry in Germany, and for that reason did not assume any advancement in the beginning of 2020 even right before Covid-19.

In the new context of Covid-19, the Division had to encounter a slowdown in most of the Industries. Certainly, this organization phase is considerably additional dependent from the cycle and buyers started in March to postpone discretionary initiatives. The Group considers that the most impacted routines will be Technologies Specialist Companies demanding engineers working on client internet sites, that can not be executed on a remote method (circa thirty% of Enterprise & Platform Solutions profits). On the reverse, Application Improvement and Routine maintenance, centered on long time period contracts should be resilient (circa forty% of Enterprise & Platform Solutions profits). In concerning, a big element of essential Electronic Tasks (circa thirty% of Enterprise & Platform Solutions profits) can be executed on a remote method, but the quantity of the organization will depend in the up coming months from the client calls for on new initiatives.

The organization in Major Knowledge & Cybersecurity (BDS) remained powerful with profits up +16.3% organically at € 259 million in the 1st quarter of 2020. In the present-day context, the remote working as effectively as the enhance of cyberattacks led companies to boost the security of their infrastructure and knowledge. As illustrations, buyers questioned for additional options of identification in quick method, and consulting on the solidity of their security infrastructure.

In Major Knowledge, there was no discontinuity in the offer chain thanks to pro-active stock management. The demand from customers stays powerful in Superior Overall performance Computing. As an example, remote obtain to SAP HANA needs extra processing electric power and for that reason greater wants of Sequana S in-memory servers. Lastly, Mission Important Method organization also recorded a significant profits development.

Commercial activity

During the 1st quarter of 2020, the Group get entry arrived at € 2,908 million representing a Guide to Bill ratio of 103%, when compared to 86% achieved over the exact same time period very last 12 months.

The primary new contracts signed over the time period were being notably in North America with a big American corporation in Protection Sector (Telecom, Media & Technologies), in Central Europe with Norddeutsche Landesbank (Economic Companies & Insurance coverage) and a international european pharmaceutical corporation (Health & Lifetime Sciences) and in Southern Europe with a key utility in France and with Ile-de-France Mobilités (Assets & Companies), as effectively as with a French banking establishment (Economic Companies & Insurance coverage).

Deal renewals of the quarter bundled big signatures with notably the 1st element of the renewal of Texas Section of Facts Assets contract (General public Sector & Protection), the renewal of Conduent contract (Telecom, Media & Technologies) in North America, a contract with a World wide European company in capital products for SAP HANA (Production) in Central Europe, as effectively as with the French UGAP (General public Sector & Protection) in Southern Europe.

In line with this dynamic professional activity, the comprehensive backlog amounted to € 22.1 billion at the stop of March 2020, representing 1.nine 12 months of profits. The comprehensive competent pipeline arrived at € 7.6 billion, representing 7.8 months of profits.

Human sources

The full headcount was 108,602 at the stop of March 2020, broadly secure when compared to 108,317 at the stop of December 2019.

In the 1st quarter of 2020, the Group employed 5,043 staff, mostly in offshore nations.

How Atos handles Covid-19 impact

Considering that stop of January, the Group management, supported by Group Human Assets, has been focusing on the well being and basic safety of employees while making certain a appropriate implementation of pre-outlined organization continuity ideas in every Division.

The Group also activated the “Always Ready” software, pulling alongside one another all Group options precisely adapted to this distressed problem and currently being proactively presented to buyers to enable them go by way of the crisis: aid to generalized homeworking such as collaboration characteristics, unique aid to public & well being institutions, reinforcement of cybersecurity protections, and so on. Customers’ opinions and satisfaction with regards to Atos teams reactivity has been overwhelmingly good. Atos is also included into several governmental initiatives throughout the earth to combat from the virus, and get ready the progressive aid of limitations and lockdowns.

To secure its operating margin, the Group has taken powerful actions on its cost foundation in the pursuing regions:

• Sturdy centralized checking of personnel prices (selecting freeze, cancellation of salary improves, impact on variable compensation, vacations, and so on.)
• Substitute of subcontractors by own freed up staff
• Cancellation of non client linked discretionary expenditures
• Sturdy saving software on non personnel prices.

In full, the Group introduced a software representing a full sum of c. four hundred million euros of financial savings in 2020.

Current 2020 goals write-up Covid-19

As the 2020 goals disclosed on February 19, 2020 were being pre Covid-19 impact, the Group updates right now its 3 goals for the comprehensive 12 months 2020, centered on the present-day macroeconomic situation of a progressive recovery over H2 2020 and 2021, as effectively as the management’s day by day conversations with Group buyers:

• Profits organic and natural evolution: concerning -2% and -four% (versus c. +2% pre Covid-19)
• Functioning margin charge: nine% to nine.5% of profits (versus +twenty bps to + forty bps higher than 2019 (10.3% described) pre Covid-19)
• No cost hard cash move: € .5 billion to € .6 billion (versus c. € .7 billion pre Covid-19)[*].

The Group suspends its targets for 2021, the very last 12 months of the 3-12 months program presented at the Trader Day held on January thirty, 2019. The Group will current its vision as effectively as its mid-time period targets at the 2020 Analyst Day (date to be rescheduled).

Postponement of Yearly General Meeting and excellent cancellation of dividend payment in 2020

Due to the excellent situations joined to the Covid-19, the Board of Directors, which satisfied on March 31, 2020, has made a decision to postpone the Yearly General Meeting in the beginning scheduled on May fourteen, 2020 to June 26, 2020.

In these unpre
cedented situations, through its session on April 21, 2020, the Board of Directors took the excellent choice not to propose the 1.forty euro per share dividend which was in the beginning considered to be submitted to the Yearly General Meeting. In addition, the Chief Government Officer as effectively as other members of the General Administration Committee have made a decision to lower by thirty% their compensation through the present-day 3-month time period from March to May 2020. The Chairman of Atos’ Board of Directors has built the exact same choice.

The Group confirms that the cancellation of the dividend this 12 months is an exception to its dividend plan with a fork out-out ratio concerning 25% and thirty% of Web money Group share.

Appendix

Profits at regular scope and trade fees reconciliation

Scope consequences amounted to €+fourteen million for profits and are mostly linked to the acquisition of Maven Wave, consolidated as of February 1, 2020 (2 months for €+18 million), the acquisition of IDnomic, consolidated as of Oct 1, 2019 (3 months for €+four million), the acquisition of X-PERION, consolidated as of December 1, 2019 (3 months for €+2 million), the disposal of some unique Unified Interaction & Collaboration routines mainly in Q1 2020 (full restatement of €-four million) as effectively as former ITO routines in the British isles beginning of H2 2019 (3 months for €-four million), and lastly the disposal and decommissioning of non-strategic routines inside CVC.

Forex trade fees consequences mainly came from the American greenback as effectively as the British pound and positively contributed to profits for €+26 million.

Meeting phone

Now, Wednesday, April 22, 2020, the Group will maintain a conference phone in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in get to remark on Atos’ Q1 2020 profits and answer inquiries from the monetary local community.

You can join the webcast of the conference:

• on internet, in the Buyers portion
• by smartphones or tablets by way of the scan of:
• by telephone with the dial-in, 5-10 minutes prior the starting time:
  • France             +33 1 70 70 07 81       code 12652364
  • Germany             +forty nine sixty nine 2222 2625       code 12652364
  • British isles             +44 844 481 9752       code 12652364
  • US             +1 646 741 3167         code 12652364
  • Other nations +44 2071 928338        code 12652364

Right after the conference, a replay of the webcast will be readily available on atos.internet, in the Buyers portion.

Forthcoming functions

June 26, 2020              Yearly General Meeting

July 27, 2020               Very first 50 percent 2020 outcomes

Oct 22, 2020         Third quarter 2020 profits

To be scheduled            2020 Analyst Day