Friday, 31 October 2008

UK leads Atos’ growth

(By Anthony Miller) The UK, under seasoned CEO Keith Wilman, was the star in Atos Origin’s firmament, leading the French SI’s organic growth at 8% in Q3 and 11% ytd. Overall, Atos grew 5% in the quarter and 6% ytd. Atos’ UK business led the group’s growth in systems integration services (+10%), and also showed “strong” managed operations growth. However the UK consulting business is still shrinking, though at a lesser pace than before. Group CEO, Philippe Germond, is still targeting “above 5%” organic growth for the FY, anticipating “a more challenging environment”. Germond is the first (I think) of the ‘majors’ brave enough to comment on the 2009 outlook, remaining “confident” (oh oh!) of positive organic growth.

Meanwhile, Atos is taking all the usual actions to cut costs including increasing the utilisation of its 4,000 offshore staff, cutting subcontractors, freezing indirect hires ,“extreme caution” on direct staff, and “adaptation of the bonus scheme to a new environment” (i.e. margin focused). All this aims to bring Atos to a 5.5% group operating margin for the year (+100bps yoy), including the divestment over the next few months of some €250-500m of loss-making, non-core businesses. Preparations for the first tranche of sell-offs are already under way.

We are meeting Keith Wilman later this morning and will update UKHotViews later.

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