First quarter of 2020 – Atos

A resilient profile and a solid equilibrium sheet to encounter an unparalleled condition

Income at € two,834 million

-.eight{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organic development

Ebook to monthly bill ratio at 103{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d}

Renewals of key contracts in North The usa

Suitable organization blend to assistance clients in Covid-19 context

Required value actions staying carried out to safeguard operating margin

SPRING transformation program to an Market strategy perfectly on track

Update of 2020 targets put up Covid-19

Paris, April 22, 2020,

Atos, a world chief in electronic transformation, nowadays announces the earnings of its to start with quarter of 2020.

Elie Girard, CEO, claimed: “In this unparalleled ecosystem exactly where uncertainty prevails, our to start with priority has been to safeguard our workforce when offering comprehensive continuity of company to our purchasers. The Team is solidly positioned to navigate easily via the disaster many thanks to deep client interactions across all industries, a resilient organization blend and a strong equilibrium sheet that offers a solid financial flexibility.

Our one hundred ten,000 colleagues across the world have delivered an immediate and exceptional reaction to customers’ challenges and will need for assistance via our “Always Ready” program developed presently considering the fact that the beginning of the year. Now our minds and efforts are turning to the put up-Covid moments, actively getting ready for the “new normal” which will see an acceleration in specific customers’ requires, namely info platforms, cybersecurity, cloud migration, electronic workplace and decarbonization.

We revise nowadays our targets for 2020 demonstrating the resilience of the Team and the willingness to share any influence quite across stakeholders. I am persuaded that Atos will emerge from this world disaster stronger than at any time and ready to move ahead to the future move.”

Q1 2020 revenue was € 2,834 million, down -.eight{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically. In the context of Covid-19 disaster and limits and lockdowns in March in most of the international locations exactly where the Team operates, earnings diminished only somewhat many thanks to the resilient profile of its businesses dependent on multi-year contracts put together with its stable organization in Significant Knowledge and Cybersecurity. Furthermore, and in spite of the disaster, the Team accelerated its professional dynamism with get entry at € 2,908 million foremost to a guide to monthly bill ratio of 103{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d}, drastically up in comparison to very last year at 86{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d}.

Q1 2020 earnings functionality by Market

Manufacturing attained € 539 million of earnings, down -two.9{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} at constant scope and exchange fees. The Market benefitted from a excellent functionality in Automotive with the ramp-up of a German motor vehicle business and Rheinmetall on info management contracts, compensating the influence in Daimler thanks to Covid-19 and the ramp down of PSA. Conversely, Manufacturing was impacted by reduce volumes with Siemens, a slowdown in the Aerospace sector thanks to Covid-19, and a number of shifts of products gross sales in the direction of the stop of the quarter.

Money Companies & Insurance coverage earnings was € 527 million in the to start with quarter 2020, down by -two.six{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as perfectly as the progress of exercise with a payment business in France which have extra than compensated for the reduction of volumes from banking establishments in Central Europe. Rising marketplaces suffered from non-recurring gross sales performed very last year in APAC and Center East & Africa. In North The usa, job dependent pursuits reduce presently observed in past quarters was accelerated in March thanks to decisions from a number of Money Companies firms to postpone or reduce discretionary bills in the context of Covid-19.

General public Sector & Defense earnings was € 584 million, up +3.two{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} at constant scope and exchange fees. The development was pushed by the solid functionality recorded in Northern Europe, many thanks to the continuation of the agreement with European Centre for Medium variety Weather conditions forecast as perfectly as with EU Lisa and wise info platform in Benelux. North The usa obtained stability even with reduce volumes, many thanks to supplemental gross sales on present contracts. The condition was extra difficult in Southern Europe, impacted by the ramp-down of Higher Efficiency Computing exercise as perfectly as non-recurring gross sales performed very last year. Central Europe was negatively impacted by reduce volumes, and lastly Rising Markets was impacted by earnings recorded very last year for the Tokyo Olympic Games preparation and not recurring this year.

Telecom, Media & Technologies attained € 443 million, up +.eight{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically, with a contrasted functionality by geography and by exercise. Higher Tech & Technologies posted a solid development, pushed by Unified Communication & Collaboration offerings in Central Europe, sustained by organic development of newly acquired business Maven Wave in North The usa and agreement ramp-up with a large associate, as perfectly as supplemental gross sales in Southern Europe. Media amplified as perfectly, benefitting from new organization progress, coupled with bigger volumes with present clients in North The usa. Telecom exercise was generally impacted by some ramp-downs in Southern Europe.

Income in Sources & Companies attained € 418 million and amplified by +.4{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically. Company in Power & Utilities sector fueled the development. In individual, the Market delivered a Higher Efficiency Pc in South The usa. Electronic workplace products and services ramped-up with a key Power company in North The usa and with National Grid in Northern Europe. The condition in Retail, Transportation & Hospitality sectors was extra difficult in the context of Covid-19. In fact, when the ramp-up of a new IoT agreement signed in the space of predictive maintenance benefitted to North The usa, the Market confronted volume reductions in Europe.

Healthcare & Life Sciences earnings was € 323 million, down by -4.9{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} in comparison to Q1 2019, impacted by volume reductions on incredibly specific contracts in equally North The usa and Northern Europe, when the market benefitted from the ramp-up of a world agreement with Bayer and a electronic workplace agreement signed very last year in Central Europe, and the ramp-up of an Australian General public Agency agreement in Rising Markets. Southern Europe benefitted from a solid exercise in electronic projects and Higher Efficiency Computing.

Q1 2020 earnings functionality by Regional Company Unit

The to start with quarter of 2020 showed distinct earnings evolution by Regional Company Units which can be summarized as follows:

• In North The usa, earnings attained € 681 million, lowering by -two.six{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically generally coming from Covid-19 brought on job stops and volume reductions in a number of Industries. The Company Unit obtained development in Telecom, Media & Technologies and Sources & Companies many thanks to new emblem, bigger volumes and ramp up of present contracts
• In Northern Europe, earnings was around stable at € 698 million. Strong organization was recorded in General public Sector & Defense generally led by the continuation of the HPC agreement with European Centre for Medium Array Weather conditions Forecast, as perfectly as by deliveries to European Union Institutions. Telecom, Media & Technologies and Manufacturing confronted some contracts ending and Healthcare & Life Sciences a reduction on Company System Outsourcing contracts
• In Southern Europe, earnings attained € 594 million, lowering by -two.six{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} Healthcare & Life Sciences posted a double-digit development many thanks to electronic projects delivered and Higher Efficiency Computing pursuits. The geography was impacted by non-recurring gross sales also on Higher Efficiency Computing pursuits performed very last year in a number of Industries
• In Central Europe, the geography amplified organically by +one.{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} foremost to a € 667 million Manufacturing benefitted from a number of ramp-up of infrastructure contracts and supplemental projects. Income in Telecom, Media & Technologies also amplified, pushed by Unified Communication & Collaboration organization. Healthcare & Life Sciences posted a double-digit development generally fueled by new contracts. General public Sector & Defense was impacted by non-recurring gross sales and projects obtained very last year when new projects in SAP HANA and in Electronic ended up performed in Germany and in Austria. Ultimately, Sources & Companies was impacted by a reduce need in Unify Communication channels
• Rising Markets attained € 194 million earnings, +one.{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} Manufacturing posted a stable development, pushed by a bigger degree of gross sales as perfectly as stronger need in electronic projects generally in Asia-Pacific and South The usa. Income in Resource & Companies strongly amplified fueled by Higher Efficiency Computing exercise in South The usa when the condition was extra difficult in Money Companies generally in Asia Pacific.

Q1 2020 earnings functionality by Division

In Infrastructure & Knowledge Management (IDM), earnings was € 1,558 million, -.5{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically. The Division ongoing to roll-out its transformation design by extending Hybrid Cloud Orchestration as perfectly as growing Electronic Workplace implementation.

The specific condition thanks to Covid-19 pandemic demanded a stable organization continuity for critical infrastructures for its clients. In fact, the Division recorded a solid need on Electronic Workplace solutions (accessing purposes from any place), business interaction offerings with Unified Collaboration & Communication, network connections, etcetera. These pursuits are joined to the distant functioning that has been put in place by a lot of companies to encounter the lockdown and preserve their exercise.

Ultimately, in the present context, the Division recorded considerably less earnings created by products gross sales and fertilization in present contracts in March.

In Company & Platform Remedies (B&PS) earnings was € 1,016 million, -4.9{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically. As a reminder, the Division was down -one.two{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} in Q4 2019 thanks to the headwinds in Money Companies in North The usa as perfectly as in Automotive market in Germany, and as a result did not count on any advancement in the beginning of 2020 even before Covid-19.

In the new context of Covid-19, the Division experienced to encounter a slowdown in most of the Industries. In fact, this organization phase is substantially extra dependent from the cycle and clients started off in March to postpone discretionary projects. The Team considers that the most impacted pursuits will be Technologies Skilled Companies necessitating engineers functioning on purchaser web-sites, that can not be performed on a distant mode (circa 30{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} of Company & Platform Remedies earnings). On the reverse, Application Progress and Routine maintenance, dependent on long expression contracts really should be resilient (circa 40{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} of Company & Platform Remedies earnings). In among, a large aspect of critical Electronic Jobs (circa 30{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} of Company & Platform Remedies earnings) can be performed on a distant mode, but the volume of the organization will rely in the future months from the purchaser calls for on new projects.

The organization in Significant Knowledge & Cybersecurity (BDS) remained solid with earnings up +16.3{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} organically at € 259 million in the to start with quarter of 2020. In the present context, the distant functioning as perfectly as the enhance of cyberattacks led companies to fortify the safety of their infrastructure and info. As illustrations, clients requested for extra solutions of identification in speedy mode, and consulting on the solidity of their safety infrastructure.

In Significant Knowledge, there was no discontinuity in the offer chain many thanks to pro-lively inventory management. The need continues to be solid in Higher Efficiency Computing. As an instance, distant accessibility to SAP HANA requires supplemental processing electric power and as a result greater requires of Sequana S in-memory servers. Ultimately, Mission Important Procedure organization also recorded a substantial earnings development.

Business exercise

All through the to start with quarter of 2020, the Team get entry attained € 2,908 million symbolizing a Ebook to Monthly bill ratio of 103{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d}, in comparison to 86{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} obtained over the very same interval very last year.

The most important new contracts signed over the interval ended up notably in North The usa with a large American business in Defense Sector (Telecom, Media & Technologies), in Central Europe with Norddeutsche Landesbank (Money Companies & Insurance coverage) and a world european pharmaceutical business (Health and fitness & Life Sciences) and in Southern Europe with a key utility in France and with Ile-de-France Mobilités (Sources & Companies), as perfectly as with a French banking institution (Money Companies & Insurance coverage).

Agreement renewals of the quarter included large signatures with notably the to start with aspect of the renewal of Texas Division of Data Sources agreement (General public Sector & Defense), the renewal of Conduent agreement (Telecom, Media & Technologies) in North The usa, a agreement with a World European organization in money items for SAP HANA (Manufacturing) in Central Europe, as perfectly as with the French UGAP (General public Sector & Defense) in Southern Europe.

In line with this dynamic professional exercise, the comprehensive backlog amounted to € 22.one billion at the stop of March 2020, symbolizing one.9 year of earnings. The comprehensive skilled pipeline attained € 7.six billion, symbolizing 7.eight months of earnings.

Human methods

The complete headcount was 108,602 at the stop of March 2020, broadly stable in comparison to 108,317 at the stop of December 2019.

In the to start with quarter of 2020, the Team hired 5,043 personnel, generally in offshore international locations.

How Atos handles Covid-19 influence

Because stop of January, the Team management, supported by Team Human Sources, has been focusing on the overall health and security of workforce when ensuring a good implementation of pre-outlined organization continuity plans in every Division.

The Team also activated the “Always Ready” program, pulling together all Team solutions especially adapted to this distressed condition and staying proactively supplied to clients to help them go via the disaster: assistance to generalized homeworking like collaboration features, specific assistance to community & overall health establishments, reinforcement of cybersecurity protections, etcetera. Customers’ responses and satisfaction with regards to Atos teams reactivity has been overwhelmingly optimistic. Atos is also associated into several governmental projects across the world to combat towards the virus, and put together the progressive aid of limits and lockdowns.

To safeguard its operating margin, the Team has taken solid actions on its value foundation in the pursuing areas:

• Strong centralized monitoring of staff expenses (choosing freeze, cancellation of income boosts, influence on variable payment, holidays, etcetera.)
• Substitute of subcontractors by individual freed up personnel
• Cancellation of non purchaser linked discretionary bills
• Strong conserving program on non staff expenses.

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

Current 2020 targets put up Covid-19

As the 2020 targets disclosed on February 19, 2020 ended up pre Covid-19 result, the Team updates nowadays its three targets for the comprehensive year 2020, dependent on the present macroeconomic circumstance of a progressive restoration over H2 2020 and 2021, as perfectly as the management’s everyday discussions with Team clients:

• Income organic evolution: among -two{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} and -4{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} (versus c. +two{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} pre Covid-19)
• Functioning margin amount: 9{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} to 9.5{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} of earnings (versus +twenty bps to + 40 bps above 2019 (10.3{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} claimed) pre Covid-19)
• No cost cash stream: € .5 billion to € .six billion (versus c. € .7 billion pre Covid-19)[*].

The Team suspends its targets for 2021, the very last year of the three-year approach offered at the Investor Working day held on January 30, 2019. The Team will existing its eyesight as perfectly as its mid-expression targets at the 2020 Analyst Working day (date to be rescheduled).

Postponement of Yearly Typical Assembly and extraordinary cancellation of dividend payment in 2020

Thanks to the extraordinary conditions joined to the Covid-19, the Board of Administrators, which met on March 31, 2020, has decided to postpone the Yearly Typical Assembly in the beginning scheduled on May 14, 2020 to June 26, 2020.

In these unparalleled conditions, all through its session on April 21, 2020, the Board of Administrators took the extraordinary decision not to suggest the one.40 euro for every share dividend which was in the beginning thought of to be submitted to the Yearly Typical Assembly. In addition, the Chief Executive Officer as perfectly as other associates of the Typical Management Committee have decided to reduce by 30{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} their payment all through the present three-thirty day period interval from March to May 2020. The Chairman of Atos’ Board of Administrators has made the very same decision.

The Team confirms that the cancellation of the dividend this year is an exception to its dividend policy with a pay back-out ratio among twenty five{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} and 30{bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} of Internet earnings Team share.

Appendix

Income at constant scope and exchange fees reconciliation

Scope effects amounted to €+14 million for earnings and are generally linked to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+eighteen million), the acquisition of IDnomic, consolidated as of October 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 specific Unified Communication & Collaboration pursuits mainly in Q1 2020 (complete restatement of €-4 million) as perfectly as previous ITO pursuits in the British isles beginning of H2 2019 (3 months for €-4 million), and lastly the disposal and decommissioning of non-strategic pursuits inside CVC.

Forex exchange fees effects mainly came from the American dollar as perfectly as the British pound and positively contributed to earnings for €+26 million.

Convention connect with

Now, 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 get to remark on Atos’ Q1 2020 earnings and reply questions from the financial local community.

You can join the webcast of the convention:

• on web, in the Investors segment
• by smartphones or tablets via the scan of:
• by phone with the dial-in, 5-10 minutes prior the starting off time:
  • France             +33 one 70 70 07 81       code 12652364
  • Germany             +49 69 2222 2625       code 12652364
  • British isles             +44 844 481 9752       code 12652364
  • US             +one 646 741 3167         code 12652364
  • Other international locations +44 2071 928338        code 12652364

Following the convention, a replay of the webcast will be offered on atos.web, in the Investors segment.

Forthcoming occasions

June 26, 2020              Yearly Typical Assembly

July 27, 2020               Initial 50 {bcdc0d62f3e776dc94790ed5d1b431758068d4852e7f370e2bcf45b6c3b9404d} 2020 final results

October 22, 2020         Third quarter 2020 earnings

To be scheduled            2020 Analyst Working day