H1 2003 Results Bernard Bourigeaud Agenda GROUP ACHIEVEMENTS - PowerPoint PPT Presentation

H1 2003 Results Bernard Bourigeaud

Agenda • GROUP ACHIEVEMENTS • H1 2003 BUSINESS PERFORMANCE • YEAR 2003 OUTLOOK • STRATEGY Turning Client Vision into Results 2

Group Achievements • Revenue growth of 3.8% • Operating profit of € 123M (7.9% margin) • Improving margin trend from 7.4% in Q1 to 8.5% in Q2 • Net debt reduced to € 386 M • Continuous & encouraging inflow of orders with a book-to-bill ratio of 108% • Consulting has expanded our range of services and increased the number of commercial opportunities Turning Client Vision into Results 3

Atos Origin Profile Well balanced End to end Global industry mix offerings presence Others Americas 5% 3% Retail Consulting EMEA Asia Pacific 7% Financial 13% 11% 2% Public Sector Services Germany France 8% 26% 7% 35% Managed Process Systems Industries Operations UK Integration 11% 51% 11% 36% Telco 23% Discrete NLs Manufacturing including 31% 20% 5% recurring business >55% recurring Strong European Focus on key revenue base accounts Turning Client Vision into Results 4

Agenda • GROUP ACHIEVEMENTS • H1 2003 BUSINESS PERFORMANCE • YEAR 2003 OUTLOOK • STRATEGY Turning Client Vision into Results 5

Financial Performance H1 2003 H1 2002 Change H2 2002 In € Millions 1543.1 1486.7 +3.8% 1556.2 Revenue 122.6 135.1 -9.2% 130.5 Income from operations 7.9% 9.1% 8.4% Operating margin 78.4 83.1 -5.7% 96.9 Net income before non recurring items & goodw ill 1.78 1.90 -6.3% 2.09 EPS* before goodw ill and non recurring items (in €) 175.9 125.4 +40.3% 256.9 Net cash from operating activities 385.6 181.4 440.3 Net debt Note (*) : In €, based on a weighted average number of shares excluding the ORA bonds linked to Atos KPMG Consulting acquisition Turning Client Vision into Results 6

Quarterly Results Sustained Profitability 8,8% 9,1% 900 9,0% 8,0% 8,5% 9,0% 800 8,0% 7,4% 700 7,0% 600 6,0% 500 5,0% 400 4,0% 300 3,0% 200 2,0% 100 1,0% 749 738 734 822 781 763 0 0,0% Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 Group Revenue (M€) Operating Margin Turning Client Vision into Results 7

Net Income H1 H1 In € Millions Comments FY03 FY02 Income From Operations 123 135 (12) (7) Net financial expenses Increase due to AKC* financing. Cost of debt stable (25) (10) Non-recurring items Cost of restructuring (25) (40) Corporate income tax Tax deductibility of restructuring costs and goodwill (7) (6) Minority interests (29) (12) Goodwill amortisation Additional goodwill on AKC Net income (Group share) 24 61 Net income before goodwill 78 83 & non recurring items (*) AKC : Atos KMPG Consulting Turning Client Vision into Results 8

Restructuring Q1 Q2 H2 Beyond 2001 2002 Plan People 2003 2003 2003 2003 1 504 1 489 Plan end of Dec 02 1 344 381 352 Update in Q2 03 230 648 193 Total end of period 1 574 733 1 381 1 574 H1 2003 2003 2004 P&L impact (M€) (10) (71) (23) (58) 0 Cash Impact (M€) (89) (67) (47) (90) (14) Provisions at period-end (M€) 49 30 Turning Client Vision into Results 9

Changing the skills base 3% increase of revenue per head sequentially Dec. 31, 2002 June 30, 2003 200 (1 032) 771 (733) New (Leavers) contracts Restructuring Hiring Replacement 28,602 of subco 27,808 New skills into the Group Staff reduction Subcontractors : stable at about 4% of productive staff Turning Client Vision into Results 10

Cash Flow H1 FY03 H1 FY02 Comments In € Millions Net cash from operating activities* 147 155 Change in working capital 29 (29) DSO 67 days Net cash from operating activities after WK 176 126 11.4% of revenue (+40%) Capital expenditure (37) (52) 2.4% of revenue (-29%) Net cash from current operations 139 73 Reorganization & restructuring (60) (24) Restructuring 47 / Reorg 13 Origin fair value adjustments (5) (7) Software licenses Disposal of intangible, tangible and financial assets 5 37 (15) (5) Other changes** DIV 4 / PS 8 / EXCH 3 Net cash before financial investments 64 74 Financial investments (10) (20) Minority interests Net Cash Flow 55 54 Opening net debt (440) (235) Closing net debt (386) (181) Gearing 50% at 30/06/03 Note (*) : Before reorganization, restructuring costs and Origin fair value adjustments Note (**) : Include common stock issues, dividends paid to minority shareholders of subsidiaries (DIV), translation differences (EXCH) and profit sharing amounts payable to French employees transferred to debt (PS) Turning Client Vision into Results 11

Balance Sheet Performance In € Millions June 30, 2003 Dec 31, 2002 June 30, 2002 Goodwill 976 1 029 402 Other fixed assets 236 271 324 Working capital 187 191 209 Capital employed 1 398 1 491 935 Equity 775 784 535 Provisions 238 267 219 Net debt 386 440 181 Capital alloted 1 398 1 491 935 Working Capital / Revenue 6.1% 6.1% 7.1% Gearing 50% 56% 34% Return on Capital Employed 7.8% 6.0% 14.8% Net Debt / EBITDA 1.1 1.1 0.5 Turning Client Vision into Results 12

Debt Calendar Funds available to meet repayment commitments Falling due within June 30, In € Millions 1 year 2 years 3 years >3 years 2003 Convertible bonds (173) - (173) - - Long-term borrowings (585) (99) (157) (153) (177) Finance leases & other borrowing (52) (32) (4) (3) (13) Total borrowings (810) (131) (334) (155) (189) • Cash currently available to meet 1 year Total cash and cash equivalents 424 commitment two times over • Current cash and 2003 cash flow more than sufficient to meet 2004 commitment Total net debt (386) • Other facilities available Turning Client Vision into Results 13

Gearing Banks financial M€ Well within borrowing covenants covenants 900 90% 77% 100% 800 80% 700 70% 56% 600 60% 55% 500 50% 50% 39% 400 40% 34% 300 30% 200 20% 100 10% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 2002 2003 Net Debt (M€) Equity (M€) Gearing Net debt / 2.0 0.5 0.5 1.6 1.0 1.2 1.0 Ebitda Turning Client Vision into Results 14

Provisions Total : 267 M€ Total : 238 M€ 24 4 6 M&A Acquisition 6 41 38 AO Merger 71 86 Fair Value Origin Operating 120 109 Provisions Pensions Dec. 31st 2002 June 30th 2003 Turning Client Vision into Results 15

Share ownership structure A A A J u n e e u g u s t f t r t N o o s h a e s f r 3 0 h 2 0 0 3 1 6 h 2 0 0 3 t t , , P h p 2 1 3 2 1 0 4 3 4 8 4 % 4 4 7 % s i l i , , . . B N P P a b a s 2 6 9 6 8 8 3 6 1 % 5 6 % r i , , . . M S o a n a n e y 2 4 6 7 1 3 6 5 6 % 5 2 % g r t l , , . . m E p o e e 4 1 2 3 4 2 0 9 % 0 8 % y s l , . . T e a s u y s o c k 3 0 1 2 9 3 0 7 % 0 6 % r r t , . . P u b c 1 6 8 5 6 9 7 9 3 8 3 % 3 5 3 % l i , , . . m m C o o n o c o J u n e 3 0 h 2 0 0 3 4 4 0 5 5 6 7 6 1 0 0 % 9 2 3 % s k a s t t f , , , . O M G R A P C K b o n d s o n s u n g 1 4 1 5 6 4 1 3 0 % t l i , , . S a u c o n u a n 3 7 0 0 0 0 0 8 % s s s t t r t t t f f l , . M G K P A u d 1 8 7 1 3 5 9 3 9 % t i , , . m m C A o o n s o c k a s o u g u s 1 6 h 2 0 0 3 4 7 7 1 2 6 7 6 1 0 0 % t f t t , , , S o c o o n 4 7 0 9 0 5 5 k p s t t i , , C o n v e b e b o n d s 1 4 4 0 5 0 1 r t i l , , M G C K P o n u n 2 0 0 3 e a n - o u 8 4 7 5 0 0 s g t r t l i , m m P o o o o o o o e n a d u n 6 9 9 7 0 5 6 1 2 8 % p e n a c n s c k t t t t t t f i l i l i , , . i l m m T o a p o e n a c o o n s o c k 5 4 7 0 9 7 3 2 t t t t l i l , , Turning Client Vision into Results 16

Consulting Strengthening our positioning • Atos KPMG Consulting is In € Millions H1 2003 H1 2002 Change H2 2002 enhancing the Group’s profile in Revenue 196 12 162 UK & NLs Income from operations 13.0 3.7 12.4 Operating margin 6.6% 30.2% 7.6% • Significant bid opportunities and Headcount at period-end 2,137 138 2,383 new contract signings arising • Bid costs affecting 2003 result • NLs restructuring nearing France completion. Some further 6% restructuring in UK to be NLs completed in Q3 2003 UK 34% 60% • Utilization rate improved to 64% in Q2 2003 Turning Client Vision into Results 17