UPDATE: Atos Origin 1st Half Ebit Down 3.1%, But Confirms Guidance
July 29 2009 - 1:06AM
Dow Jones News
IT services company Atos Origin (ATO.FR) Wednesday said
first-half earnings before interest and tax fell 3.1%, but
confirmed it still aims to improve EBIT this year despite an
expected decline in revenue as companies continue to keep a tight
lid on spending.
EBIT for the first six months of the year fell to EUR118 million
from EUR121.8 million last year. This was above an average EUR114
million forecast by six analysts polled by Dow Jones Newswires.
Revenue fell 2.3% to EUR2.59 billion from EUR2.65 billion last
year and in line with analysts' expectations of EUR2.59
billion.
Consulting revenues continued to decline most sharply in the
second quarter as companies rein in spending.
Last year's EBIT and revenue figures are at constant exchange
rates and exclude Atos' Italian operations and Atos Euronext Market
Solutions, or AEMS, which the company agreed to sell in 2007.
Still, the Paris-based company, which manages the IT systems for
the Olympic Games, confirmed its full-year targets. It aims to
improve EBIT by 50 to 100 basis points this year and expects 2009
revenue to fall about slightly.
The group also said it aims to accelerate margin improvement in
the second half with the help of its new action plan Top
Operational Performance, launched by new Chief Executive Thierry
Breton, and still targets positive free cash flow this year.
Atos said its first-half EBIT margin was 4.6%.
Excluding the impact of the insolvency of German retailer
Arcandor AG (ACAGF), which was one of Atos' clients, the group
improved its operational profitability by 50 basis points in the
first half, Atos said in a statement.
The company has undergone a series of restructuring in the past
year and a half, accelerated by Breton when he took office in
February.
Net profit dropped 89% to EUR14 million from EUR125 million last
year in the first half, notably due to higher restructuring
charges. Analysts had seen net profit at EUR15.4 million.
Net debt at June 30 stood at EUR328 million, compared to EUR304
million at the end of the last quarter.
Atos shares closed Tuesday at EUR28.23. The stock has gained
about 58% since the start of the year as investors have regained
confidence in the group's ability to improve margins after a year
of radical management changes and restructuring.
Atos competes with European peers Capgemini (CAP.FR) and
U.K.-based Logica PLC (LOG.LN). Capgemini reports first half
results Thursday.
Company Web site: www.atosorigin.com
-By Ruth Bender and Will Horobin, Dow Jones Newswires; +33 1 40
17 17 40; ruth.bender@dowjones.com