First quarter of 2020 – Atos

A resilient profile and a potent balance sheet to encounter an unparalleled situation

Earnings at € two,834 million

-.eight% organic progress

Guide to invoice ratio at 103%

Renewals of key contracts in North The us

Proper company blend to support clients in Covid-19 context

Vital charge steps currently being executed to guard functioning margin

SPRING transformation application to an Market method perfectly on monitor

Update of 2020 targets put up Covid-19

Paris, April 22, 2020,

Atos, a world-wide chief in electronic transformation, these days announces the profits of its very first quarter of 2020.

Elie Girard, CEO, said: “In this unparalleled setting exactly where uncertainty prevails, our very first priority has been to guard our personnel even though offering full continuity of support to our clientele. The Team is solidly positioned to navigate efficiently through the disaster many thanks to deep shopper interactions throughout all industries, a resilient company blend and a robust balance sheet that provides a potent monetary flexibility.

Our one hundred ten,000 colleagues throughout the globe have delivered an immediate and superb response to customers’ challenges and will need for support through our “Always Ready” application made now considering that the starting of the yr. Now our minds and initiatives are turning to the put up-Covid periods, actively preparing for the “new normal” which will see an acceleration in particular customers’ wants, specifically info platforms, cybersecurity, cloud migration, electronic place of work and decarbonization.

We revise these days our targets for 2020 demonstrating the resilience of the Team and the willingness to share any impression fairly throughout stakeholders. I am convinced that Atos will arise from this world-wide disaster more robust than ever and prepared to shift ahead to the future move.”

Q1 2020 revenue was € 2,834 million, down -.eight% organically. In the context of Covid-19 disaster and limitations and lockdowns in March in most of the countries exactly where the Team operates, profits decreased only marginally many thanks to the resilient profile of its companies dependent on multi-yr contracts put together with its strong company in Huge Info and Cybersecurity. Also, and in spite of the disaster, the Team accelerated its industrial dynamism with buy entry at € 2,908 million primary to a guide to invoice ratio of 103%, significantly up when compared to very last yr at 86%.

Q1 2020 profits performance by Market

Producing arrived at € 539 million of profits, down -two.nine% at consistent scope and exchange prices. The Market benefitted from a great performance in Automotive with the ramp-up of a German vehicle business and Rheinmetall on info administration contracts, compensating the impression in Daimler because of to Covid-19 and the ramp down of PSA. Conversely, Producing was impacted by decreased volumes with Siemens, a slowdown in the Aerospace sector because of to Covid-19, and quite a few shifts of products gross sales in the direction of the stop of the quarter.

Fiscal Services & Insurance policies profits was € 527 million in the very first quarter 2020, down by -two.six% organically. Northern Europe and Southern Europe benefited respectively from the ramp-up with Aegon in the United Kingdom, as perfectly as the development of exercise with a payment business in France which have extra than compensated for the reduction of volumes from banking establishments in Central Europe. Growing markets experienced from non-repeated gross sales executed very last yr in APAC and Middle East & Africa. In North The us, job dependent activities reduce now observed in previous quarters was accelerated in March because of to selections from quite a few Fiscal Services firms to postpone or lower discretionary expenditures in the context of Covid-19.

General public Sector & Defense profits was € 584 million, up +3.two% at consistent scope and exchange prices. The progress was pushed by the potent performance recorded in Northern Europe, many thanks to the continuation of the deal with European Center for Medium assortment Weather conditions forecast as perfectly as with EU Lisa and wise info platform in Benelux. North The us achieved steadiness even with decreased volumes, many thanks to extra gross sales on existing contracts. The situation was extra hard in Southern Europe, impacted by the ramp-down of High Overall performance Computing exercise as perfectly as non-repeated gross sales executed very last yr. Central Europe was negatively impacted by decreased volumes, and eventually Growing Markets was impacted by profits recorded very last yr for the Tokyo Olympic Online games preparing and not repeated this yr.

Telecom, Media & Technologies arrived at € 443 million, up +.eight% organically, with a contrasted performance by geography and by exercise. High Tech & Technologies posted a potent progress, pushed by Unified Interaction & Collaboration choices in Central Europe, sustained by organic progress of newly obtained business Maven Wave in North The us and deal ramp-up with a massive husband or wife, as perfectly as extra gross sales in Southern Europe. Media enhanced as perfectly, benefitting from new company development, coupled with greater volumes with existing clients in North The us. Telecom exercise was predominantly i
mpacted by some ramp-downs in Southern Europe.

Earnings in Assets & Services arrived at € 418 million and enhanced by +.four% organically. Organization in Vitality & Utilities sector fueled the progress. In individual, the Market shipped a High Overall performance Laptop or computer in South The us. Digital place of work services ramped-up with a key Vitality company in North The us and with National Grid in Northern Europe. The situation in Retail, Transportation & Hospitality sectors was extra hard in the context of Covid-19. In truth, even though the ramp-up of a new IoT deal signed in the place of predictive servicing benefitted to North The us, the Market confronted quantity reductions in Europe.

Healthcare & Life Sciences profits was € 323 million, down by -four.nine% when compared to Q1 2019, impacted by quantity reductions on pretty particular contracts in the two North The us and Northern Europe, even though the sector benefitted from the ramp-up of a world-wide deal with Bayer and a electronic place of work deal signed very last yr in Central Europe, and the ramp-up of an Australian General public Agency deal in Growing Markets. Southern Europe benefitted from a potent exercise in electronic jobs and High Overall performance Computing.

Q1 2020 profits performance by Regional Organization Unit

The very first quarter of 2020 showed distinctive profits evolution by Regional Organization Units which can be summarized as follows:

• In North The us, profits arrived at € 681 million, decreasing by -two.six% organically predominantly coming from Covid-19 induced job stops and quantity reductions in quite a few Industries. The Organization Unit achieved progress in Telecom, Media & Technologies and Assets & Services many thanks to new logo, greater volumes and ramp up of existing contracts
• In Northern Europe, profits was about secure at € 698 million. Potent company was recorded in General public Sector & Defense predominantly led by the continuation of the HPC deal with European Centre for Medium Array Weather conditions Forecast, as perfectly as by deliveries to European Union Establishments. Telecom, Media & Technologies and Manufacturing confronted some contracts ending and Healthcare & Life Sciences a reduction on Organization Course of action Outsourcing contracts
• In Southern Europe, profits arrived at € 594 million, decreasing by -two.six% Healthcare & Life Sciences posted a double-digit progress many thanks to electronic jobs shipped and High Overall performance Computing activities. The geography was impacted by non-repeated gross sales also on High Overall performance Computing activities executed very last yr in quite a few Industries
• In Central Europe, the geography enhanced organically by +one.% primary to a € 667 million Producing benefitted from quite a few ramp-up of infrastructure contracts and extra jobs. Earnings in Telecom, Media & Technologies also enhanced, pushed by Unified Interaction & Collaboration company. Healthcare & Life Sciences posted a double-digit progress predominantly fueled by new contracts. General public Sector & Defense was impacted by non-repeated gross sales and jobs achieved very last yr even though new jobs in SAP HANA and in Digital had been executed in Germany and in Austria. Lastly, Assets & Services was impacted by a decreased need in Unify Interaction channels
• Growing Markets arrived at € 194 million profits, +one.% Producing posted a strong progress, pushed by a greater level of gross sales as perfectly as more robust need in electronic jobs predominantly in Asia-Pacific and South The us. Earnings in Source & Services strongly enhanced fueled by High Overall performance Computing exercise in South The us even though the situation was extra hard in Fiscal Services predominantly in Asia Pacific.

Q1 2020 profits performance by Division

In Infrastructure & Info Management (IDM), profits was € 1,558 million, -.5% organically. The Division continued to roll-out its transformation model by extending Hybrid Cloud Orchestration as perfectly as rising Digital Workplace implementation.

The particular situation because of to Covid-19 pandemic essential a strong company continuity for critical infrastructures for its clients. In truth, the Division recorded a potent need on Digital Workplace alternatives (accessing purposes from any place), business conversation choices with Unified Collaboration & Interaction, network connections, etc. These activities are connected to the distant operating that has been place in location by a good deal of companies to encounter the lockdown and preserve their exercise.

Lastly, in the recent context, the Division recorded less profits produced by products gross sales and fertilization in existing contracts in March.

In Organization & System Answers (B&PS) profits was € 1,016 million, -four.nine% organically. As a
reminder, the Division was down -one.two% in This fall 2019 because of to the headwinds in Fiscal Services in North The us as perfectly as in Automotive sector in Germany, and consequently did not hope any enhancement in the starting 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 truth, this company segment is a lot extra dependent from the cycle and clients began in March to postpone discretionary jobs. The Team considers that the most impacted activities will be Technologies Qualified Services demanding engineers operating on purchaser web pages, that are not able to be executed on a distant manner (circa 30% of Organization & System Answers profits). On the opposite, Software Enhancement and Maintenance, dependent on extensive expression contracts must be resilient (circa 40% of Organization & System Answers profits). In between, a massive aspect of critical Digital Assignments (circa 30% of Organization & System Answers profits) can be executed on a distant manner, but the quantity of the company will count in the future months from the purchaser needs on new jobs.

The company in Huge Info & Cybersecurity (BDS) remained potent with profits up +sixteen.3% organically at € 259 million in the very first quarter of 2020. In the recent context, the distant operating as perfectly as the raise of cyberattacks led companies to enhance the stability of their infrastructure and info. As examples, clients asked for extra alternatives of identification in quick manner, and consulting on the solidity of their stability infrastructure.

In Huge Info, there was no discontinuity in the offer chain many thanks to professional-energetic stock administration. The need remains potent in High Overall performance Computing. As an instance, distant obtain to SAP HANA calls for extra processing electrical power and consequently greater wants of Sequana S in-memory servers. Lastly, Mission Significant Procedure company also recorded a significant profits progress.

Commercial exercise

Through the very first quarter of 2020, the Team buy entry arrived at € 2,908 million representing a Guide to Invoice ratio of 103%, when compared to 86% achieved more than the same period very last yr.

The principal new contracts signed more than the period had been notably in North The us with a massive American business in Defense Sector (Telecom, Media & Technologies), in Central Europe with Norddeutsche Landesbank (Fiscal Services & Insurance policies) and a world-wide european pharmaceutical business (Health and fitness & Life Sciences) and in Southern Europe with a key utility in France and with Ile-de-France Mobilités (Assets & Services), as perfectly as with a French banking institution (Fiscal Services & Insurance policies).

Contract renewals of the quarter provided massive signatures with notably the very first aspect of the renewal of Texas Office of Information and facts Assets deal (General public Sector & Defense), the renewal of Conduent deal (Telecom, Media & Technologies) in North The us, a deal with a Global European firm in funds goods for SAP HANA (Producing) in Central Europe, as perfectly as with the French UGAP (General public Sector & Defense) in Southern Europe.

In line with this dynamic industrial exercise, the full backlog amounted to € 22.one billion at the stop of March 2020, representing one.nine yr of profits. The full skilled pipeline arrived at € seven.six billion, representing seven.eight months of profits.

Human means

The whole 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 very first quarter of 2020, the Team employed 5,043 staff, predominantly in offshore countries.

How Atos handles Covid-19 impression

Considering that stop of January, the Team administration, supported by Team Human Assets, has been focusing on the well being and safety of personnel even though ensuring a appropriate implementation of pre-outlined company continuity options in every Division.

The Team also activated the “Always Ready” application, pulling jointly all Team alternatives specially tailored to this distressed situation and currently being proactively supplied to clients to enable them go through the disaster: support to generalized homeworking which include collaboration functions, particular support to public & well being establishments, reinforcement of cybersecurity protections, etc. Customers’ feedback and fulfillment with regards to Atos groups reactivity has been overwhelmingly constructive. Atos is also associated into quite a few governmental jobs throughout the globe to struggle in opposition to the virus, and get ready the progressive reduction of limitations and lockdowns.

To guard its functioning margin, the Team has taken potent steps on its charge base in the next places:

• Potent centralized checking of personnel expenses (hiring freeze, cancellation of wage improves, impression on variable compensation, holidays, etc.)
• Alternative of subcontractors by personal freed up staff
• Cancellation of non purchaser similar discretionary expenditures
• Potent conserving application on non personnel expenses.

In whole, the Team launched a application representing a whole total of c. four hundred million euros of price savings in 2020.

Updated 2020 targets put up Covid-19

As the 2020 targets disclosed on February 19, 2020 had been pre Covid-19 result, the Team updates these days its 3 targets for the full yr 2020, dependent on the recent macroeconomic circumstance of a progressive recovery more than H2 2020 and 2021, as perfectly as the management’s day-to-day discussions with Team clients:

• Earnings organic evolution: between -two% and -four% (versus c. +two% pre Covid-19)
• Working margin rate: nine% to nine.5% of profits (versus +twenty bps to + 40 bps previously mentioned 2019 (10.3% claimed) pre Covid-19)
• Free hard cash stream: € .5 billion to € .six billion (versus c. € .seven billion pre Covid-19)[*].

The Team suspends its targets for 2021, the very last yr of the 3-yr plan offered at the Trader Day held on January 30, 2019. The Team will current its vision as perfectly as its mid-expression targets at the 2020 Analyst Day (date to be rescheduled).

Postponement of Annual Standard Assembly and outstanding cancellation of dividend payment in 2020

Because of to the outstanding circumstances connected to the Covid-19, the Board of Directors, which achieved on March 31, 2020, has made the decision to postpone the Annual Standard Assembly in the beginning scheduled on May perhaps fourteen, 2020 to June 26, 2020.

In these unparalleled circumstances, through its session on April 21, 2020, the Board of Directors took the outstanding choice not to suggest the one.40 euro for every share dividend which was in the beginning considered to be submitted to the Annual Stand
ard Assembly. In addition, the Main Govt Officer as perfectly as other customers of the Standard Management Committee have made the decision to lower by 30% their compensation through the recent 3-month period from March to May perhaps 2020. The Chairman of Atos’ Board of Directors has created the same choice.

The Team confirms that the cancellation of the dividend this yr is an exception to its dividend coverage with a pay back-out ratio between twenty five% and 30% of Net money Team share.

Appendix

Earnings at consistent scope and exchange prices reconciliation

Scope outcomes amounted to €+fourteen million for profits and are predominantly similar to the acquisition of Maven Wave, consolidated as of February one, 2020 (two months for €+eighteen million), the acquisition of IDnomic, consolidated as of Oct one, 2019 (3 months for €+four million), the acquisition of X-PERION, consolidated as of December one, 2019 (3 months for €+two million), the disposal of some particular Unified Interaction & Collaboration activities mainly in Q1 2020 (whole restatement of €-four million) as perfectly as previous ITO activities in the British isles starting of H2 2019 (3 months for €-four million), and eventually the disposal and decommissioning of non-strategic activities in CVC.

Forex exchange prices outcomes mainly came from the American greenback as perfectly as the British pound and positively contributed to profits for €+26 million.

Conference call

Today, Wednesday, April 22, 2020, the Team will keep a meeting call in English at 08:00 am (CET – Paris), chaired by Elie Girard, CEO, in buy to comment on Atos’ Q1 2020 profits and solution thoughts from the monetary neighborhood.

You can be a part of the webcast of the meeting:

• on net, in the Buyers part
• by smartphones or tablets through the scan of:
• by phone with the dial-in, 5-10 minutes prior the starting time:
  • France             +33 one 70 70 07 81       code 12652364
  • Germany             +49 sixty nine 2222 2625       code 12652364
  • British isles             +forty four 844 481 9752       code 12652364
  • US             +one 646 741 3167         code 12652364
  • Other countries +forty four 2071 928338        code 12652364

Right after the meeting, a replay of the webcast will be obtainable on atos.net, in the Buyers part.

Forthcoming gatherings

June 26, 2020              Annual Standard Assembly

July 27, 2020               Very first fifty percent 2020 success

Oct 22, 2020         3rd quarter 2020 profits

To be scheduled            2020 Analyst Day