Atos Origin 2008 annual Results

Thierry Breton, Chairman and CEO of Atos Origin, said: “Despite a solid growth especially of our recurring activities, and an 11 percent increase of our operating margin, Atos Origin’s operational performance remained at 4.8 percent, below the benchmark of our competitors. With its new organisation and the immediate implementation of the TOP Program, Atos Origin has taken the decisions and the actions in order to face the very strong economic slowdown but also to increase significantly its operating margin in 2009. This is the clear mandate I have received from the Shareholders and the newly elected Board of Directors““. Based on the new scope excluding Italy and AEMS Exchange which were disposed of during the year, full-year 2008 Group revenue reached EUR 5 479 million which represented an organic growth of +5.6 percent. All service lines contributed to the revenue organic growth with +1 percent in Consulting, +5.4 percent in Systems Integration and +6.4 percent in Managed Operations. Growth on recurring activities, including Managed Operations and Application Management which represent 68 per cent of total revenue, reached +6.5 percent. All major geographical areas reported organic growth except, as expected, The Netherlands which were affected by the re-insourcing of desktop services by KPN. On the scope which excludes Italy and AEMS Exchange disposed during the year 2008, the operating margin was EUR 261 million or 4.8 percent of revenues representing an organic increase of +11 percent compared to EUR 235 million last year at same scope and exchange rates. In the last quarter 2008, the Group focused on executing the cost saving plan: reduction of hirings, decrease of subcontractors, reduction of G&A. These actions allowed achieving a strong improvement in the operating margin of the fourth quarter of the year compared to the third quarter. Consulting reached an operating margin at 4.8 percent of revenue. In The Netherlands, the operating margin remained at double digits. The United Kingdom continued on its recovery trend (+3 points compared to 2007) whereas France had a more difficult year with a reduced margin at 2 percent of revenue. In Systems Integration, the operating margin reached 3.9 percent of revenue. Except The Netherlands, all the major geographies improved their operating margin. Group utilization rate in Systems Integration remained steady at 79 percent. In Managed Operations, the operating margin was 8.2 per cent of revenue, mainly led by the profit improvement in the United Kingdom and in all geographies of Atos Worldline. In France, excluding Atos Worldline, the profitability remained almost stable. Germany had a contrasted profit evolution with an improvement in the systems development area and a decrease in IT outsourcing mainly with its first customer. The Netherlands were affected by the expected revenue decline with KPN desktop re-insourcing. Building upon achieving the recurring savings which are mandatory to sustain the competitiveness of Atos Origin, the Total Operational Performance (TOP) Program will act upon new levers, with more ambitious goals and a faster pace of execution to achieve its main objectives: to face the tough economic environment while closing the existing operating margin gap versus the Industry. TOP is built around four major transformation levers supported by twenty transversal initiatives across the organisation. 1. Leveraging the “Global Atos Origin” concept to better serve our customers and generate synergies through simplification and standardization across the organization: five initiatives such as cross-border deal process simplification, global SAP, global Consulting ; 2. Closing the gaps with industry benchmark operational performance: nine initiatives looking at metrics such as offshoring rate, office sqm/person, G&A ratios, etc ; 3. Developing “Lean management” to close the productivity gap and to generate permanent efficiency progress: four initiatives in areas like helpdesk management, customer services, infrastructures ; 4. Implementing sustainability initiatives focusing on people development and protecting the environment: two initiatives. The TOP Program management has been built to allow fast implementation and quick resolution of issues. The TOP Program leader reports directly to the Chairman and CEO of Atos Origin and manages twenty TOP Leaders from the countries, the service lines and the support functions. Already, more than two hundred initiatives’ team members from Atos Origin are involved in all these projects. gilles.arditti@atosorigin.com www.atosorigin.com  

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