First quarter 2016 revenue

• Revenue at € 2,757 million 
• +15.0% at constant exchange rates 
• +1.6% organically 

• Order entry at € 2,794 million 
• +27% year-on-year 
• Book to bill ratio at 101% 

A strong start of the year reinforcing the achievement of all 2016 objectives

Bezons, April 21, 2016 - Atos, a global leader in digital services, today announces its 2016 first quarter revenue. Revenue was € 2,757 million, up +1.6% organically and +15.0% at constant exchange rates. Order entry was € 2,794 million leading to a book to bill ratio of 101%.

Thierry Breton, Chairman and CEO said: “The Group had a strong start of the year both in revenue and bookings and experienced its highest Q1 commercial performance since I joined the Company. This materializes the strong alignment of our global offerings with the demand of our clients for transformational and automated managed services and digitization. We are continuously winning market share in cloud transformation and reinforcing our expertise in new fast growing digital businesses such as predictive and cognitive analytic solutions with Atos Codex. 

Following the first quarter, we are very confident in the achievement of all the 2016 objectives, driving profitable growth through high value technologies and innovative solutions.”

Q1 2016 revenue performance by Service Line

In Managed Services, the Group continued to successfully drive the transition of its customers to hybrid cloud infrastructures resulting in positive organic growth, thanks to an increase in volumes and gains in market share through new contracts. Managed Services revenue was € 1,555 million, +26.4% at constant exchange rates and +0.4% at constant scope and exchange rates. Growth materialized in Germany thanks to increasing revenue with Siemens, in North America with new contracts in hybrid cloud, and in Asia Pacific with higher volumes in Financial Services.

In Consulting & Systems Integration revenue was € 778 million, up +0.4% at constant scope and exchange rates. This return to growth was supported by the strong sales dynamic (110% book to bill in Q1 after 133% in Q4) and the workforce management enabling a utilization rate improvement. In Germany the situation continued to improve with a positive revenue growth led by a high level of order entry. Revenue grew in France thanks to several new projects mainly in the public sector.

Revenue increase accelerated in Big Data & Cybersecurity, up +12.2% organically to reach € 137 million in the first quarter of 2016. The growth was led by new contracts in Electronic Protection Systems in France, in Cybersecurity in the UK, in sales of software licenses in Germany, and High Performance Computing in Iberia. Demand remained very strong for encryption, access management, and Intrusion testing solutions as well as for Big Data services.

From a contributive perspective to Atos, Worldline revenue was € 287 million, improving by +6.7% organically. All three Global Business Lines contributed to the growth, with acceleration in Commercial Acquiring thanks to increasing volumes. Financial Processing growth was mainly driven by high volumes recorded on issuing and acquiring processing as well as eSEPA platforms.

A detailed presentation of Worldline 2016 first quarter revenue is available at  worldline.com, in the investors section.

Q1 2016 revenue performance by Business Unit

During the first quarter of 2016, revenue grew in most of the large Business Units:

• in Germany with additional business driving growth in Managed Services, notably with Siemens, and in Consulting & Systems Integration where the recovery plan implemented last year materialized by the return to growth in Q1, as anticipated;
• in France as a result of Systems Integration strongly growing, the continuous traction of new contracts in Big Data & Cybersecurity, and the improvement in Managed Services;
• in North America thanks to increased volumes and new contracts with private cloud components;
• in Other Business Units thanks to a strong growth in Asia Pacific and South America;
• and in Worldline thanks to the continued dynamic of its core payment businesses.

During the first quarter of the year, revenue in United Kingdom & Ireland faced as planned a base effect with a particularly high Q1 last year. In Benelux & The Nordics, a strong Q1 2016 book to bill ratio at 131% with new logo signatures and the strengthening of the management team make Atos confident about the Business Unit to return to revenue growth during the year.

Commercial activity

During the first quarter of 2016, the Group recorded its highest order entry at € 2,794 million, up +27% year-on-year, representing a book to bill ratio of 101%.

The commercial activity was well balanced by Service Line. Consulting & Systems Integration and Big Data & Cybersecurity with book to bill ratio at 110% and 117% respectively and Managed Services and Worldline book to bill was almost at 100%. In Q1 2016, large contracts were signed in Managed Services, for example with European Investment Bank (EIB: Banque Européenne d’Investissement) or in the UK public sector. Main new contracts in Consulting & Systems Integration were in the telco and manufacturing sectors in the Netherlands, while Big Data & Cybersecurity signed new contracts around High Performance Computing and Cybersecurity. Worldline sales dynamic was also strong in particular with the renewal of major commercial acquiring and financial processing contracts in Belgium and France.

In line with the dynamic commercial activity, the full backlog at the end of March 2016 amounted to € 18.9 billion, representing 1.7 year of revenue. The full qualified pipeline was € 6.4 billion, compared to € 6.2 billion at the end of 2015 and representing 6.8 months of revenue.

Human resources

The total headcount of the Group was 96,298 at the end of March 2016. The increase of +5.4% of the Group workforce compared to 91,322 at the end of December 2015 was mainly due to the circa 5,200 staff who joined the Group from Unify on February 1st, 2016, of which circa 3,300 staff in Unify Software & Platforms.

2016 objectives

The Group confirms all its objectives for 2016 as stated in the February 24, 2016 release, i.e.:

Revenue: to continue to improve organic growth compared to 2015. Objective of a revenue growth at constant exchange rates above +8%.

Operating margin: between 9.0% and 9.5% of revenue*.

Free cash flow: circa € 550 million**.

The figures above include Unify Managed Services from February 1st, 2016 and exclude Equens contribution. * excluding the amortization of equity based compensation plans representing circa 30 basis points in 2015 and 2016e ** excluding proceeds from equity based compensation which represented € 57 million in 2015 and circa € 50 million in 2016e

Appendix

Revenue and operating margin at constant scope and exchange rates reconciliation

Exchange rates effect accounted for a total of €-31 million, mainly coming from the British pound (-3% year-on-year), the Brazilian real (-26%), and the Argentine peso (-39%), partly compensated by the US dollar (+3%).

Scope effects on Q1 2015 statutory revenue amounted to €+318 million mainly related to the positive contribution of Xerox ITO (3 months for €+295 million) and Unify (2 months for €+68 million) and to €-45 million following (i) the early termination of the DWP WCA contract (2 months), (ii) the disposal of on-sites services in France (2 months), (iii) the sale of the Occupational Health business in January 2016 (3 months), and (iv) the external revenue made with Unify and accounted as internal revenue further to the acquisition (2 months).

Q1 2016 revenue performance by Market

Conference call

Today, Thursday, April 21, 2016, Thierry Breton; Chairman and CEO, Elie Girard, Chief Financial Officer, and Patrick Adiba, Chief Commercial Officer, will comment on Atos’ first quarter 2016 revenue and answer questions from the financial community during a conference call in English starting at 8:00 am (CET - Paris).

The conference will be webcasted on atos.net, in the Investors section. 

You can join the webcast of the conference:

• on atos.net, in the Investors section
• by telephone with the dial-in:

France    + 33 1 70 48 01 66   code 3838435

UK          + 44 20 3427 1915   code 3838435

US          +1 212 444 0412      code 3838435

• by smartphones or tablets through the scan of:

Forthcoming events

May 26, 2016               Annual General Meeting 

July 26, 2016               First half 2016 results 

October 20, 2016        Third quarter 2016 revenue