First quarter of 2020 – Atos

A resilient profile and a strong balance sheet to deal with an unparalleled circumstance

Revenue at € 2,834 million

-.eight% organic expansion

Ebook to invoice ratio at 103%

Renewals of main contracts in North The united states

Proper company blend to guidance clients in Covid-19 context

Essential expense steps currently being implemented to protect functioning margin

SPRING transformation program to an Business method very well on monitor

Update of 2020 goals put up Covid-19

Paris, April 22, 2020,

Atos, a worldwide chief in electronic transformation, nowadays announces the earnings of its very first quarter of 2020.

Elie Girard, CEO, stated: “In this unparalleled natural environment the place uncertainty prevails, our very first precedence has been to protect our workforce though supplying comprehensive continuity of services to our clientele. The Team is solidly positioned to navigate efficiently by way of the disaster thanks to deep shopper interactions throughout all industries, a resilient company blend and a sturdy balance sheet that supplies a strong fiscal flexibility.

Our 110,000 colleagues throughout the world have delivered an immediate and excellent reaction to customers’ issues and will need for guidance by way of our “Always Ready” program designed by now considering the fact that the beginning of the year. Now our minds and efforts are turning to the put up-Covid situations, actively preparing for the “new normal” which will see an acceleration in unique customers’ demands, specifically data platforms, cybersecurity, cloud migration, electronic place of work and decarbonization.

We revise nowadays our goals for 2020 demonstrating the resilience of the Team and the willingness to share any effect relatively throughout stakeholders. I am convinced that Atos will arise from this worldwide disaster much better than at any time and prepared to transfer ahead to the following action.”

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 the place the Team operates, earnings lowered only a little bit thanks to the resilient profile of its corporations centered on multi-year contracts merged with its solid company in Huge Info and Cybersecurity. Additionally, and in spite of the disaster, the Team accelerated its industrial dynamism with purchase entry at € 2,908 million major to a book to invoice ratio of 103%, substantially up as opposed to previous year at 86%.

Q1 2020 earnings performance by Business

Manufacturing reached € 539 million of earnings, down -2.nine% at frequent scope and trade premiums. The Business benefitted from a fantastic performance in Automotive with the ramp-up of a German automobile firm and Rheinmetall on data management contracts, compensating the effect in Daimler because of to Covid-19 and the ramp down of PSA. Conversely, Manufacturing was impacted by reduce volumes with Siemens, a slowdown in the Aerospace sector because of to Covid-19, and a number of shifts of machines income in direction of the conclude of the quarter.

Economical Companies & Insurance policies earnings was € 527 million in the very first quarter 2020, down by -2.six% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as very well as the development of activity with a payment firm in France which have more than compensated for the reduction of volumes from banking institutions in Central Europe. Growing marketplaces endured from non-recurring income done previous year in APAC and Middle East & Africa. In North The united states, undertaking centered functions lower by now observed in earlier quarters was accelerated in March because of to choices from a number of Economical Companies companies to postpone or decrease discretionary costs in the context of Covid-19.

Community Sector & Defense earnings was € 584 million, up +three.2% at frequent scope and trade premiums. The expansion was pushed by the strong performance recorded in Northern Europe, thanks to the continuation of the deal with European Centre for Medium array Weather conditions forecast as very well as with EU Lisa and clever data platform in Benelux. North The united states reached balance inspite of reduce volumes, thanks to further income on current contracts. The circumstance was more difficult in Southern Europe, impacted by the ramp-down of Significant Functionality Computing activity as very well as non-recurring income done previous year. Central Europe was negatively impacted by reduce volumes, and lastly Growing Markets was impacted by earnings recorded previous year for the Tokyo Olympic Games preparing and not recurring this year.

Telecom, Media & Technologies reached € 443 million, up +.eight% organically, with a contrasted performance by geography and by activity. Significant Tech & Technologies posted a strong expansion, pushed by Unified Interaction & Collaboration offerings in Central Europe, sustained by organic expansion of recently obtained firm Maven Wave in North The united states and deal ramp-up with a large associate, as very well as further income in Southern Europe. Media improved as very well, benefitting from new company development, coupled with larger volumes with current clients in North The united states. Telecom activity was mostly impacted by some ramp-downs in Southern Europe.

Revenue in Sources & Companies reached € 418 million and improved by +.4% organically. Organization in Electrical power & Utilities sector fueled the expansion. In unique, the Business shipped a Significant Functionality Laptop or computer in South The united states. Electronic place of work services ramped-up with a main Electrical power provider in North The united states and with National Grid in Northern Europe. The circumstance in Retail, Transportation & Hospitality sectors was more difficult in the context of Covid-19. Without a doubt, though the ramp-up of a new IoT deal signed in the spot of predictive maintenance benefitted to North The united states, the Business confronted quantity reductions in Europe.

Healthcare & Life Sciences earnings was € 323 million, down by -4.nine% as opposed to Q1 2019, impacted by quantity reductions on quite unique contracts in both North The united states and Northern Europe, though the sector benefitted from the ramp-up of a worldwide deal with Bayer and a electronic place of work deal signed previous year in Central Europe, and the ramp-up of an Australian Community Company deal in Growing Markets. Southern Europe benefitted from a strong activity in electronic jobs and Significant Functionality Computing.

Q1 2020 earnings performance by Regional Organization Device

The very first quarter of 2020 confirmed distinctive earnings evolution by Regional Organization Models which can be summarized as follows:

• In North The united states, earnings reached € 681 million, lowering by -2.six% organically mostly coming from Covid-19 brought on undertaking stops and quantity reductions in a number of Industries. The Organization Device reached expansion in Telecom, Media & Technologies and Sources & Companies thanks to new emblem, larger volumes and ramp up of current contracts
• In Northern Europe, earnings was around stable at € 698 million. Potent company was recorded in Community Sector & Defense mostly led by the continuation of the HPC deal with European Centre for Medium Selection Weather conditions Forecast, as very well as by deliveries to European Union Institutions. Telecom, Media & Technologies and Manufacturing confronted some contracts ending and Healthcare & Life Sciences a reduction on Organization System Outsourcing contracts
• In Southern Europe, earnings reached € 594 million, lowering by -2.six% Healthcare & Life Sciences posted a double-digit expansion thanks to electronic jobs shipped and Significant Functionality Computing functions. The geography was impacted by non-recurring income also on Significant Functionality Computing functions done previous year in a number of Industries
• In Central Europe, the geography improved organically by +1.% major to a € 667 million Manufacturing benefitted from a number of ramp-up of infrastructure contracts and further jobs. Revenue in Telecom, Media & Technologies also improved, pushed by Unified Interaction & Collaboration company. Healthcare & Life Sciences posted a double-digit expansion mostly fueled by new contracts. Community Sector & Defense was impacted by non-recurring income and jobs reached previous year though new jobs in SAP HANA and in Electronic had been done in Germany and in Austria. Finally, Sources & Companies was impacted by a reduce desire in Unify Interaction channels
• Growing Markets reached € 194 million earnings, +1.% Manufacturing posted a solid expansion, pushed by a larger degree of income as very well as much better desire in electronic jobs mostly in Asia-Pacific and South The united states. Revenue in Resource & Companies strongly improved fueled by Significant Functionality Computing activity in South The united states though the circumstance was more difficult in Economical Companies mostly in Asia Pacific.

Q1 2020 earnings performance by Division

In Infrastructure & Info Administration (IDM), earnings was € 1,558 million, -.five% organically. The Division ongoing to roll-out its transformation design by extending Hybrid Cloud Orchestration as very well as growing Electronic Office implementation.

The unique circumstance because of to Covid-19 pandemic necessary a solid company continuity for crucial infrastructures for its clients. Without a doubt, the Division recorded a strong desire on Electronic Office solutions (accessing applications from everywhere), business communication offerings with Unified Collaboration & Interaction, network connections, and so forth. These functions are connected to the remote doing work that has been put in put by a whole lot of providers to deal with the lockdown and manage their activity.

Finally, in the recent context, the Division recorded much less earnings created by machines income and fertilization in current contracts in March.

In Organization & Platform Answers (B&PS) earnings was € 1,016 million, -4.nine% organically. As a reminder, the Division was down -1.2% in Q4 2019 because of to the headwinds in Economical Companies in North The united states as very well as in Automotive sector in Germany, and thus did not count on any enhancement in the beginning of 2020 even prior to Covid-19.

In the new context of Covid-19, the Division had to deal with a slowdown in most of the Industries. Without a doubt, this company phase is much more dependent from the cycle and clients started off in March to postpone discretionary jobs. The Team considers that the most impacted functions will be Technologies Qualified Companies demanding engineers doing work on buyer web sites, that cannot be done on a remote manner (circa thirty% of Organization & Platform Answers earnings). On the reverse, Software Enhancement and Upkeep, centered on extensive expression contracts should really be resilient (circa forty% of Organization & Platform Answers earnings). In between, a large component of crucial Electronic Tasks (circa thirty% of Organization & Platform Answers earnings) can be done on a remote manner, but the quantity of the company will count in the following months from the buyer calls for on new jobs.

The company in Huge Info & Cybersecurity (BDS) remained strong with earnings up +sixteen.three% organically at € 259 million in the very first quarter of 2020. In the recent context, the remote doing work as very well as the increase of cyberattacks led providers to boost the protection of their infrastructure and data. As examples, clients asked for more solutions of identification in fast manner, and consulting on the solidity of their protection infrastructure.

In Huge Info, there was no discontinuity in the offer chain thanks to pro-active stock management. The desire continues to be strong in Significant Functionality Computing. As an illustration, remote entry to SAP HANA necessitates further processing power and thus bigger demands of Sequana S in-memory servers. Finally, Mission Significant Process company also recorded a high earnings expansion.

Commercial activity

Through the very first quarter of 2020, the Team purchase entry reached € 2,908 million representing a Ebook to Bill ratio of 103%, as opposed to 86% reached in excess of the exact time period previous year.

The key new contracts signed in excess of the time period had been notably in North The united states with a large American firm in Defense Sector (Telecom, Media & Technologies), in Central Europe with Norddeutsche Landesbank (Economical Companies & Insurance policies) and a worldwide european pharmaceutical firm (Health & Life Sciences) and in Southern Europe with a main utility in France and with Ile-de-France Mobilités (Sources & Companies), as very well as with a French banking institution (Economical Companies & Insurance policies).

Agreement renewals of the quarter incorporated large signatures with notably the very first component of the renewal of Texas Division of Data Sources deal (Community Sector & Defense), the renewal of Conduent deal (Telecom, Media & Technologies) in North The united states, a deal with a World-wide European agency in funds products for SAP HANA (Manufacturing) in Central Europe, as very well as with the French UGAP (Community Sector & Defense) in Southern Europe.

In line with this dynamic industrial activity, the comprehensive backlog amounted to € 22.1 billion at the conclude of March 2020, representing 1.nine year of earnings. The comprehensive skilled pipeline reached € 7.six billion, representing 7.eight months of earnings.

Human sources

The complete headcount was 108,602 at the conclude of March 2020, broadly stable as opposed to 108,317 at the conclude of December 2019.

In the very first quarter of 2020, the Team hired five,043 employees, mostly in offshore international locations.

How Atos handles Covid-19 effect

Considering the fact that conclude of January, the Team management, supported by Team Human Sources, has been concentrating on the health and basic safety of workforce though ensuring a correct implementation of pre-outlined company continuity plans in each Division.

The Team also activated the “Always Ready” program, pulling jointly all Team solutions especially tailored to this distressed circumstance and currently being proactively available to clients to assistance them go by way of the disaster: guidance to generalized homeworking together with collaboration attributes, unique guidance to community & health institutions, reinforcement of cybersecurity protections, and so forth. Customers’ feedback and satisfaction with regards to Atos groups reactivity has been overwhelmingly beneficial. Atos is also included into numerous governmental jobs throughout the world to fight towards the virus, and put together the progressive relief of restrictions and lockdowns.

To protect its functioning margin, the Team has taken strong steps on its expense foundation in the next regions:

• Potent centralized monitoring of staff expenses (employing freeze, cancellation of wage improves, effect on variable payment, holidays, and so forth.)
• Substitute of subcontractors by have freed up employees
• Cancellation of non buyer related discretionary costs
• Potent preserving program on non staff expenses.

In complete, the Team released a program representing a complete volume of c. four hundred million euros of cost savings in 2020.

Up to date 2020 goals put up Covid-19

As the 2020 goals disclosed on February 19, 2020 had been pre Covid-19 result, the Team updates nowadays its three goals for the comprehensive year 2020, centered on the recent macroeconomic circumstance of a progressive restoration in excess of H2 2020 and 2021, as very well as the management’s each day discussions with Team clients:

• Revenue organic evolution: between -2% and -4% (compared to c. +2% pre Covid-19)
• Functioning margin fee: nine% to nine.five% of earnings (compared to +20 bps to + forty bps higher than 2019 (10.three% claimed) pre Covid-19)
• Free funds move: € .five billion to € .six billion (compared to c. € .7 billion pre Covid-19)[*].

The Team suspends its targets for 2021, the previous year of the three-year system offered at the Investor Working day held on January thirty, 2019. The Team will current its eyesight as very well as its mid-expression targets at the 2020 Analyst Working day (date to be rescheduled).

Postponement of Yearly Normal Assembly and fantastic cancellation of dividend payment in 2020

Due to the fantastic instances connected to the Covid-19, the Board of Directors, which met on March 31, 2020, has made the decision to postpone the Yearly Normal Assembly to begin with scheduled on May possibly 14, 2020 to June 26, 2020.

In these unparalleled instances, through its session on April 21, 2020, the Board of Directors took the fantastic decision not to propose the 1.forty euro for every share dividend which was to begin with regarded as to be submitted to the Yearly Normal Assembly. In addition, the Chief Government Officer as very well as other members of the Normal Administration Committee have made the decision to decrease by thirty% their payment through the recent three-month time period from March to May possibly 2020. The Chairman of Atos’ Board of Directors has manufactured the exact decision.

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

Appendix

Revenue at frequent scope and trade premiums reconciliation

Scope effects amounted to €+14 million for earnings and are mostly related to the acquisition of Maven Wave, consolidated as of February 1, 2020 (2 months for €+18 million), the acquisition of IDnomic, consolidated as of October 1, 2019 (three months for €+4 million), the acquisition of X-PERION, consolidated as of December 1, 2019 (three months for €+2 million), the disposal of some unique Unified Interaction & Collaboration functions largely in Q1 2020 (complete restatement of €-4 million) as very well as previous ITO functions in the British isles beginning of H2 2019 (three months for €-4 million), and lastly the disposal and decommissioning of non-strategic functions inside CVC.

Currency trade premiums effects largely came from the American dollar as very well as the British pound and positively contributed to earnings for €+26 million.

Meeting connect with

Today, Wednesday, April 22, 2020, the Team will maintain a convention connect with in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in purchase to comment on Atos’ Q1 2020 earnings and response thoughts from the fiscal group.

You can be part of the webcast of the convention:

• on internet, in the Investors section
• by smartphones or tablets by way of the scan of:
• by phone with the dial-in, five-10 minutes prior the starting off time:
  • France             +33 1 70 70 07 81       code 12652364
  • Germany             +forty nine 69 2222 2625       code 12652364
  • British isles             +forty four 844 481 9752       code 12652364
  • US             +1 646 741 3167         code 12652364
  • Other international locations +forty four 2071 928338        code 12652364

Immediately after the convention, a replay of the webcast will be offered on atos.internet, in the Investors section.

Forthcoming functions

June 26, 2020              Yearly Normal Assembly

July 27, 2020               1st 50 percent 2020 outcomes

October 22, 2020         3rd quarter 2020 earnings

To be scheduled            2020 Analyst Working day