First quarter of 2020 – Atos

A resilient profile and a strong equilibrium sheet to experience an unparalleled condition

Revenue at € two,834 million

-.8% natural progress

Ebook to monthly bill ratio at 103%

Renewals of main contracts in North America

Appropriate company blend to guidance customers in Covid-19 context

Required charge actions staying executed to shield working margin

SPRING transformation plan to an Market solution perfectly on keep track of

Update of 2020 targets write-up Covid-19

Paris, April 22, 2020,

Atos, a international chief in digital transformation, currently announces the profits of its initially quarter of 2020.

Elie Girard, CEO, mentioned: “In this unparalleled atmosphere in which uncertainty prevails, our initially priority has been to shield our workers though featuring whole continuity of company to our consumers. The Team is solidly positioned to navigate effortlessly by way of the disaster thanks to deep client relationships across all industries, a resilient company blend and a strong equilibrium sheet that delivers a strong financial overall flexibility.

Our 110,000 colleagues across the world have delivered an rapid and excellent reaction to customers’ worries and need to have for guidance by way of our “Always Ready” plan created currently considering the fact that the beginning of the year. Now our minds and efforts are turning to the write-up-Covid moments, actively planning for the “new normal” which will see an acceleration in specific customers’ demands, namely information platforms, cybersecurity, cloud migration, digital office and decarbonization.

We revise currently our targets for 2020 demonstrating the resilience of the Team and the willingness to share any effect pretty across stakeholders. I am convinced that Atos will arise from this international disaster much better than ever and completely ready to transfer ahead to the next phase.”

Q1 2020 revenue was € 2,834 million, down -.8% organically. In the context of Covid-19 disaster and limits and lockdowns in March in most of the nations in which the Team operates, profits lessened only slightly thanks to the resilient profile of its businesses primarily based on multi-year contracts combined with its sound company in Significant Details and Cybersecurity. Also, and in spite of the disaster, the Team accelerated its business dynamism with buy entry at € 2,908 million leading to a e-book to monthly bill ratio of 103%, appreciably up compared to past year at 86%.

Q1 2020 profits performance by Market

Production achieved € 539 million of profits, down -two.9% at frequent scope and trade prices. The Market benefitted from a great performance in Automotive with the ramp-up of a German vehicle firm and Rheinmetall on information administration contracts, compensating the effect in Daimler because of to Covid-19 and the ramp down of PSA. Conversely, Production was impacted by decrease volumes with Siemens, a slowdown in the Aerospace sector because of to Covid-19, and many shifts of tools profits in the direction of the finish of the quarter.

Monetary Services & Insurance plan profits was € 527 million in the initially quarter 2020, down by -two.6% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as perfectly as the advancement of action with a payment firm 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 done past year in APAC and Center East & Africa. In North America, challenge primarily based functions lower currently noticed in previous quarters was accelerated in March because of to conclusions from many Monetary Services corporations to postpone or lower discretionary fees in the context of Covid-19.

General public Sector & Protection profits was € 584 million, up +three.two% at frequent scope and trade prices. The progress was driven by the strong performance recorded in Northern Europe, thanks to the continuation of the agreement with European Centre for Medium vary Climate forecast as perfectly as with EU Lisa and clever information system in Benelux. North America realized security despite decrease volumes, thanks to supplemental profits on present contracts. The condition was additional complicated in Southern Europe, impacted by the ramp-down of Large Performance Computing action as perfectly as non-repeated profits done past year. Central Europe was negatively impacted by decrease volumes, and finally Developing Markets was impacted by profits recorded past year for the Tokyo Olympic Online games preparation and not repeated this year.

Telecom, Media & Technological innovation achieved € 443 million, up +.8% organically, with a contrasted performance by geography and by action. Large Tech & Technological innovation posted a strong progress, driven by Unified Conversation & Collaboration choices in Central Europe, sustained by natural progress of freshly acquired firm Maven Wave in North America and agreement ramp-up with a significant associate, as perfectly as supplemental profits in Southern Europe. Media elevated as perfectly, benefitting from new company advancement, coupled with greater volumes with present customers in North America. Telecom action was largely impacted by some ramp-downs in Southern Europe.

Revenue in Means & Services achieved € 418 million and elevated by +.4% organically. Business in Electricity & Utilities sector fueled the progress. In certain, the Market delivered a Large Performance Personal computer in South America. Digital office solutions ramped-up with a main Electricity service provider in North America and with National Grid in Northern Europe. The condition in Retail, Transportation & Hospitality sectors was additional complicated in the context of Covid-19. In fact, though the ramp-up of a new IoT agreement signed in the area of predictive servicing benefitted to North America, the Market confronted quantity reductions in Europe.

Health care & Existence Sciences profits was € 323 million, down by -4.9% compared to Q1 2019, impacted by quantity reductions on quite specific contracts in both North America and Northern Europe, though the market benefitted from the ramp-up of a international agreement with Bayer and a digital office agreement signed past year in Central Europe, and the ramp-up of an Australian General public Company agreement in Developing Markets. Southern Europe benefitted from a strong action in digital projects and Large Performance Computing.

Q1 2020 profits performance by Regional Business Unit

The initially quarter of 2020 confirmed distinctive profits evolution by Regional Business Models which can be summarized as follows:

• In North America, profits achieved € 681 million, decreasing by -two.6% organically largely coming from Covid-19 brought on challenge stops and quantity reductions in many Industries. The Business Unit realized progress in Telecom, Media & Technological innovation and Means & Services thanks to new brand, greater volumes and ramp up of present contracts
• In Northern Europe, profits was approximately steady at € 698 million. Strong company was recorded in General public Sector & Protection largely led by the continuation of the HPC agreement with European Centre for Medium Variety Climate Forecast, as perfectly as by deliveries to European Union Institutions. Telecom, Media & Technological innovation and Manufacturing confronted some contracts ending and Health care & Existence Sciences a reduction on Business Process Outsourcing contracts
• In Southern Europe, profits achieved € 594 million, decreasing by -two.6% Health care & Existence Sciences posted a double-digit progress thanks to digital projects delivered and Large Performance Computing functions. The geography was impacted by non-repeated profits also on Large Performance Computing functions done past year in many Industries
• In Central Europe, the geography elevated organically by +one.% leading to a € 667 million Production benefitted from many ramp-up of infrastructure contracts and supplemental projects. Revenue in Telecom, Media & Technological innovation also elevated, driven by Unified Conversation & Collaboration company. Health care & Existence Sciences posted a double-digit progress largely fueled by new contracts. General public Sector & Protection was impacted by non-repeated profits and projects realized past year though new projects in SAP HANA and in Digital had been done in Germany and in Austria. At last, Means & Services was impacted by a decrease need in Unify Conversation channels
• Developing Markets achieved € 194 million profits, +one.% Production posted a sound progress, pushed by a greater degree of profits as perfectly as much better need in digital projects largely in Asia-Pacific and South America. Revenue in Resource & Services strongly elevated fueled by Large Performance Computing action in South America though the condition was additional complicated in Monetary Services largely in Asia Pacific.

Q1 2020 profits performance by Division

In Infrastructure & Details Administration (IDM), profits was € 1,558 million, -.five% organically. The Division continued to roll-out its transformation model by extending Hybrid Cloud Orchestration as perfectly as growing Digital Place of work implementation.

The specific condition because of to Covid-19 pandemic expected a sound company continuity for important infrastructures for its customers. In fact, the Division recorded a strong need on Digital Place of work options (accessing apps from anyplace), organization conversation choices with Unified Collaboration & Conversation, community connections, etcetera. These functions are connected to the distant functioning that has been put in location by a ton of companies to experience the lockdown and preserve their action.

At last, in the existing context, the Division recorded a lot less profits created by tools profits and fertilization in present contracts in March.

In Business & System Methods (B&PS) profits was € 1,016 million, -4.9% organically. As a reminder, the Division was down -one.two% in This fall 2019 because of to the headwinds in Monetary Services
in North America as perfectly as in Automotive market in Germany, and as a result did not hope any improvement in the beginning of 2020 even prior to Covid-19.

In the new context of Covid-19, the Division experienced to experience a slowdown in most of the Industries. In fact, this company phase is much additional dependent from the cycle and customers commenced in March to postpone discretionary projects. The Team considers that the most impacted functions will be Technological innovation Professional Services necessitating engineers functioning on purchaser websites, that can’t be done on a distant method (circa thirty% of Business & System Methods profits). On the opposite, Software Enhancement and Upkeep, primarily based on extended phrase contracts need to be resilient (circa 40% of Business & System Methods profits). In among, a significant component of important Digital Projects (circa thirty% of Business & System Methods profits) can be done on a distant method, but the quantity of the company will rely in the next months from the purchaser requires on new projects.

The company in Significant Details & Cybersecurity (BDS) remained strong with profits up +16.three% organically at € 259 million in the initially quarter of 2020. In the existing context, the distant functioning as perfectly as the boost of cyberattacks led companies to boost the security of their infrastructure and information. As illustrations, customers asked for additional options of identification in rapid method, and consulting on the solidity of their security infrastructure.

In Significant Details, there was no discontinuity in the source chain thanks to professional-energetic inventory administration. The need stays strong in Large Performance Computing. As an illustration, distant accessibility to SAP HANA demands supplemental processing power and as a result larger sized demands of Sequana S in-memory servers. At last, Mission Vital Process company also recorded a high profits progress.

Professional action

During the initially quarter of 2020, the Team buy entry achieved € 2,908 million symbolizing a Ebook to Monthly bill ratio of 103%, compared to 86% realized around the similar interval past year.

The major new contracts signed around the interval had been notably in North America with a significant American firm in Protection Sector (Telecom, Media & Technological innovation), in Central Europe with Norddeutsche Landesbank (Monetary Services & Insurance plan) and a international european pharmaceutical firm (Health & Existence Sciences) and in Southern Europe with a main utility in France and with Ile-de-France Mobilités (Means & Services), as perfectly as with a French banking institution (Monetary Services & Insurance plan).

Deal renewals of the quarter integrated significant signatures with notably the initially component of the renewal of Texas Department of Information Means agreement (General public Sector & Protection), the renewal of Conduent agreement (Telecom, Media & Technological innovation) in North America, a agreement with a World wide European organization in capital merchandise for SAP HANA (Production) in Central Europe, as perfectly as with the French UGAP (General public Sector & Protection) in Southern Europe.

In line with this dynamic business action, the whole backlog amounted to € 22.one billion at the finish of March 2020, symbolizing one.9 year of profits. The whole capable pipeline achieved € seven.6 billion, symbolizing seven.8 months of profits.

Human methods

The total headcount was 108,602 at the finish of March 2020, broadly steady compared to 108,317 at the finish of December 2019.

In the initially quarter of 2020, the Team hired five,043 staff, largely in offshore nations.

How Atos handles Covid-19 effect

Since finish of January, the Team administration, supported by Team Human Means, has been focusing on the health and safety of workers though making sure a proper implementation of pre-defined company continuity designs in each individual Division.

The Team also activated the “Always Ready” plan, pulling jointly all Team options precisely adapted to this distressed condition and staying proactively provided to customers to support them go by way of the disaster: guidance to generalized homeworking which include collaboration options, specific guidance to public & health institutions, reinforcement of cybersecurity protections, etcetera. Customers’ feedback and gratification with regards to Atos teams reactivity has been overwhelmingly positive. Atos is also included into many governmental projects across the world to battle versus the virus, and put together the progressive relief of limits and lockdowns.

To shield its working margin, the Team has taken strong actions on its charge foundation in the following regions:

• Strong centralized checking of personnel costs (hiring freeze, cancellation of income improves, effect on variable payment, vacations, etcetera.)
• Substitution of subcontractors by have freed up staff
• Cancellation of non purchaser connected discretionary fees
• Strong saving plan on non personnel costs.

In total, the Team released a plan symbolizing a total amount of c. four hundred million euros of discounts in 2020.

Updated 2020 targets write-up Covid-19

As the 2020 targets disclosed on February 19, 2020 had been pre Covid-19 impact, the Team updates currently its 3 targets for the whole year 2020, primarily based on the existing macroeconomic situation of a progressive recovery around H2 2020 and 2021, as perfectly as the management’s daily conversations with Team customers:

• Revenue natural evolution: among -two% and -4% (vs . c. +two% pre Covid-19)
• Functioning margin price: 9% to 9.five% of profits (vs . +twenty bps to + 40 bps previously mentioned 2019 (ten.three% reported) pre Covid-19)
• Cost-free cash stream: € .five billion to € .6 billion (vs . c. € .seven billion pre Covid-19)[*].

The Team suspends its targets for 2021, the past year of the 3-year prepare presented at the Trader Day held on January thirty, 2019. The Team will present its vision as perfectly as its mid-phrase targets at the 2020 Analyst Day (day to be rescheduled).

Postponement of Once-a-year Common Assembly and remarkable cancellation of dividend payment in 2020

Because of to the remarkable instances connected to the Covid-19, the Board of Administrators, which fulfilled on March 31, 2020, has decided to postpone the Once-a-year Common Assembly to begin with scheduled on May possibly 14, 2020 to June 26, 2020.

In these unparalleled instances, in the course of its session on April 21, 2020, the Board of Administrators took the remarkable determination not to propose the one.40 euro for every share dividend which was to begin with viewed as to be submitted to the Once-a-year Common Assembly. In addition, the Chief Executive Officer as perfectly as other users of the Common Administration Committee have
decided to lower by thirty% their payment in the course of the existing 3-thirty day period interval from March to May possibly 2020. The Chairman of Atos’ Board of Administrators has made the similar determination.

The Team confirms that the cancellation of the dividend this year is an exception to its dividend coverage with a pay back-out ratio among 25% and thirty% of Internet profits Team share.

Appendix

Revenue at frequent scope and trade prices reconciliation

Scope consequences amounted to €+14 million for profits and are largely connected to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+18 million), the acquisition of IDnomic, consolidated as of October one, 2019 (three months for €+4 million), the acquisition of X-PERION, consolidated as of December one, 2019 (three months for €+two million), the disposal of some specific Unified Conversation & Collaboration functions typically in Q1 2020 (total restatement of €-4 million) as perfectly as previous ITO functions in the United kingdom beginning of H2 2019 (three months for €-4 million), and finally the disposal and decommissioning of non-strategic functions in just CVC.

Forex trade prices consequences typically arrived from the American dollar as perfectly as the British pound and positively contributed to profits for €+26 million.

Meeting connect with

Today, Wednesday, April 22, 2020, the Team will hold a convention connect with in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in buy to remark on Atos’ Q1 2020 profits and reply inquiries from the financial neighborhood.

You can join the webcast of the convention:

• on internet, in the Investors part
• by smartphones or tablets by way of the scan of:
• by phone with the dial-in, five-ten minutes prior the setting up time:
  • France             +33 one 70 70 07 81       code 12652364
  • Germany             +forty nine 69 2222 2625       code 12652364
  • United kingdom             +44 844 481 9752       code 12652364
  • US             +one 646 741 3167         code 12652364
  • Other nations +44 2071 928338        code 12652364

After the convention, a replay of the webcast will be obtainable on atos.internet, in the Investors part.

Forthcoming situations

June 26, 2020              Once-a-year Common Assembly

July 27, 2020               Very first 50 % 2020 success

October 22, 2020         3rd quarter 2020 profits

To be scheduled            2020 Analyst Day