Atos - Registration Document 2016

E Financial E.1

Operational review

Operational review

E.1

Executive summary

E.1.1

negatively contributed to revenue for a total of €-299 million, mainly coming from the British pound depreciating versus the Euro while American dollar had almost no effect on a full year basis. has been accounted for as discontinued operations from the date of acquisition and is therefore not consolidated in the figures presented in the operational review. Currency exchange rates Communication & Collaboration Services (CCS) business has been transferred to Atos continuing operations, more specifically to Infrastructure & Data Management (IDM), and is included in the figures presented hereafter. The Group also benefitted from the acquisitions completed at the end of Q3, in North America with Anthelio, and Equens, Paysquare and Kormercni Smartpay by Worldline. The Unify Software and Platforms (S&P) business semester. In addition to the organic growth which strongly improved compared to last year, the year-on-year growth benefitted from the contribution of Xerox ITO acquired in July 2015, Unify since February 2016, of which only the Revenue in 2016 reached € 11,717 million, +9.7% compared to 2015 on a statutory basis (+12.8% at constant exchange rates) and +1.8% organically. The Group reached a +1.8% organic growth in the second semester of 2016 with a fourth quarter hitting +1.9%, continuing the positive trend observed in the first Operating margin reached € 1,104 million in 2016, up +24.9% year-on-year mainly thanks to productivity gains from industrialization programs, the effect of recent acquisitions and related costs synergies, notably Bull, Xerox ITO and Unify CCS rates. The improvement even increased to +140 bps excluding pension one-offs, as the amount recorded in the second semester of 2016 was comparable to that recorded in the second half of the prior year, and over the full year that amount was close to half of the amount recorded over the full year 2015, as planned. compared to 8.3% in 2015 at constant scope and exchange which impacted positively IDM, as well as the organic growth acceleration. Profitability reached 9.4% of revenue, +110 bps Representing 56% of the Group activity, Infrastructure & Data Management (IDM) revenue reached € 6,595 million, up volumes in cloud with several long standing but also new large the first semester). The Division continued the transformation of classic infrastructure to cloud based environment. Revenue significantly increased in transitional and transformation services as well as new services such as cloud orchestration. These additional services together with volume increases and market share gains largely offset unit price decreases from hybrid cloud transformation. This trend materialized particularly in North America with a strong commercial dynamism fueled by increased revenue grew by +0.9% in 2016 (vs +0.4% in 2015) with an accelerated growth of +1.1% in the second half (vs +0.6% in +16.6% year-on-year. At constant scope and exchange rates,

with large ministries. The situation was more challenging for Benelux & The Nordics, notably due to ending contracts mainly in Financial Services, and to a lesser extent in France and Central & Eastern Europe. first semester within all markets. Asia Pacific also contributed to growth mostly thanks to higher volumes in Financial Services and in the Telco, Media & Utilities. In the UK, after a first semester where growth was affected by an unfavorable comparison basis (NS&I outstanding volumes in 2015), the Business Unit generated a +4.5% revenue organic growth in the second half thanks to the increasing activity in the public sector customers within Public & Health and Telecom, Media & Utilities sectors. Germany confirmed the healthy trend recorded in the Operating margin in Infrastructure & Data management was € 682.9 million, representing 10.4% of revenue. This strong improvement of +190 basis points compared to 2015 came from the top line improvement as well as continued significant savings throughout all geographies. In particular, the successful migration to the Cloud of several customers’ infrastructure generated significant unit cost reductions. The Division also benefitted from the successful execution of the large Unify restructuring program which enhanced the operating margin of the IDM activities. Solutions (B&PS) revenue was € 3,194 million in 2016, up +0.8% organically at constant scope and exchange rates. The Division even increased its revenue by +1.2% in the fourth quarter. The improvements mainly came from Germany and France growing in all markets. “Other Business Units” faced the Representing 27% of the Group’s activity, Business & Platform base effect of one major contract delivered in 2015 in the Public sector in Turkey. The business acceleration was fueled by new contracts in Digital Transformation with several large clients such as Aegon, University College London Hospital and Western Australian Government. revenue. The improvement of +20 basis points compared to last year at constant scope and exchange rates (+40 basis points excluding pension effects) was mainly attributable to the successful workforce improvement actions in most of the large Operating margin was € 206.1 million, representing 6.5% of the Division was achieved while investing in innovation and new offerings to enhance the planned operating margin catch up. European geographies. The Division continued to increase its competitiveness through Global delivery and offshoring mainly with international private companies on both large projects and Application Management. Besides, Germany strongly increased its operating margin thanks to its recovery on top line (compared to prior year) and from the strong improvement in productivity. Overall, this first step of profitability turnaround of

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