Atos Origin sees sales slip but margins improve
29/07/2010
Atos Origin reports book to bill ratio of 125 per cent for its Consulting business, an indication that the business line will stabilise over the coming quarters.

Fuente:  www.consultant-news.com    Fecha:  29.07.2010

Atos Origin sees sales slip but margins improve

Atos Origin, the international IT services company, said revenue for the first half of 2010 was EUR 2.5 billion, down 4.6% from last year but in line with the company’s forecasts.

Operating margin was EUR 150 million, representing 6.0 per cent of revenue. Atos credits the performance to the continued roll-out of its restructuring TOP Program announced at the end of 2008. The result takes into account the new business tax (CVAE) in France. Without this regulatory impact, the operating margin was EUR 141 million, representing 5.7 per cent of revenue, compared to 4.6 per cent reached in the first half of 2009, an increase of 110 basis points.

Operating income was EUR 96 million after EUR 30 million expenses for reorganisation and rationalisation. Net income Group share reached EUR 60 million compared to EUR 18 million for the first half of 2009.

Adjusted net income (before unusual, abnormal and infrequent items net of tax) reached EUR 98 million representing an increase of +33 per cent compared to EUR 74 million reported in the first half of 2009.

Thierry Breton, Chairman and CEO of Atos Origin said: “In the first half of 2010, the Group succeeded in raising its operating margin by 110 basis points compared to the first half of 2009, while limiting the revenue variation to -4.6 per cent. These results allow the Group to confirm its annual guidance and show that Atos Origin is on track to improve its operating margin by at least +250 basis points between 2008 and 2011. In addition to the roll out of the TOP Program, in the first half of 2010 we focussed our efforts on preparing the Group and particularly the sales force for a better economic environment. In terms of innovation we launched new offerings in the areas of Smart Energy and Hi-Tech Transactional Services (HTTS) including Smart Mobility services."

Revenue by service line

Consulting reported revenue of EUR 110 million and an organic decline of -17 per cent. In line with Group expectations, tough market conditions persisted during the first half of 2010. The book to bill ratio was 125 per cent, an indication that this business line will stabilise over the coming quarters.

In Managed Services, the revenue for the first half of 2010 was EUR 903 million, representing 36 per cent of total revenue. This activity declined by 6 per cent organically, coming equally from the expected decline in revenue from the German client Arcandor and from less cross selling with existing clients, particularly in The Netherlands and in France, partially compensated by strong volumes in Asia.

Systems Integration revenue was EUR 902 million, representing 36 per cent of total revenue, and an organic decline of 6 per cent. This activity had decreased by 11 per cent in 2009, as a result of lower demand and price pressure, especially in the Benelux and in Spain. During the first quarter of 2010, the decline was 9 per cent, and has been limited to a decline of 2 per cent in the second quarter, thanks to an organic growth of 4 per cent in France. In the Netherlands, price has stabilised in the Time and Material activity and therefore, revenue decline was 9 per cent in the second quarter compared to 24 per cent in the first quarter.

The Hi-Tech Transactional Services activity reported revenue of EUR 499 million representing 20 per cent of the Group revenue and up by 2 per cent organically. After a 0.6 per cent growth in the first quarter, HTTS increased by 3.8 per cent in the second quarter. Over the first half, the Payment business which represents two thirds of total HTTS revenue, increased by 4 per cent, while electronic services (e-CS) were almost flat. At the same time, revenue related to financial markets dropped by 8 per cent, due to the investments in new offerings.

BPO Medical revenue was EUR 80 million up by 5 per cent organically thanks to increasing volumes. This activity is processed entirely in the United Kingdom through several multi-year contracts.

Pipeline

Group order entries totalled EUR 2,844 million in the first half of 2010. The book to bill ratio was 114 per cent, above the level of 112 per cent reached in the first half of 2009. At 30 June 2010, full backlog was EUR 7.3 billion representing 1.4 year of revenue, an increase of 5 per cent compared to 31 December 2009. The full qualified pipeline was EUR 2.6 billion at the same level as one year ago.

2010 forecast

As part of its 2008-2011 plan to improve its profitability, the Group confirms its ambition to increase its operating margin by 50 to 100 basis points in 2010.

Due to the Arcandor bankruptcy, Atos expects in 2010 a slight revenue organic decrease, however at a lesser extent than the one achieved in 2009.