Atos - Registration Document 2016

E Financial

E.1

Operational review

in migration to Orchestrated Hybrid Cloud and the full effect of Xerox ITO sales synergies program; North America was up +4.5%, benefitting from a solid trend • maintained all over the year, notably with the sales dynamic Worldline continued to contribute to the Group organic growth • with +3.7% over the period, the sustained dynamic of its core payment businesses compensating for the effect of the two contracts terminated last year; solutions and also B&PS; France reached a solid +2.3% organic growth rate, fueled in • particular by the strong demand for Big Data & Cybersecurity Middle East & Africa, and South America. “Other Business Units” also positively contributed to the Group • revenue growth, thanks to double digit growth in Asia Pacific, UK & Ireland was almost stable. The high growth during the second half of the year (+4.5%) offset the first half base effect thanks to a strong activity in the Public sector with contract ramp-ups and increased volumes and projects. recovery. 2016 was impacted by the ramp-down of contracts not renewed in 2015 in the Infrastructure & Data Management business, mainly in Financial Services. The new management team appointed in the Summer actively focused on the Business Unit The situation remained challenging for Benelux & The Nordics. In 2016, the Group continued to execute the Tier One Program through industrialization, global delivery from offshore locations, and continuous optimization of SG&A. In addition, the Group benefitted from the full impact of costs synergies following the integration of Bull and Xerox ITO, coupled with the effect of the Unify restructuring plan on the CCS activities profitability. The margin improvement was particularly visible in large Business Units such as Germany, North America, the UK and also France, while Benelux & the Nordics faced decreasing margins coming from a lower level of activity across most Divisions. Global structures costs for IT Services as a percentage of revenue increased by +20 basis points compared to 2015 at constant scope and exchange rates, mostly due the positive effect recorded in H1 2015 for pension plan optimization. optimization plan which resulted in a € 41 million one-off gain (recorded in H2 in the UK), compared to € 74 million in 2015. In 2016, the Group continued to execute its pension schemes Globally, the Group improved its operating margin rate by +110 basis points in 2016. The improvement was +140 basis points excluding pension schemes optimization one-offs both in 2015 and in 2016. In 2016, the Group order entry totaled € 13,027 million , up +16.2% year-on-year, representing a book to bill ratio of 111% , consistent between the first and second semesters, and notably 119% in the fourth quarter.

centers protecting customers on a worldwide basis and 24 hours a day. sector. The demand for High Performance Computing remained very strong in order to support the growing Big Data processing needs of customers, as well as the classic offerings in encryption, identity and access management, and intrusion testing solutions. The demand increased for security operating Revenue in Big Data & Cybersecurity (BDS) was € 666 million in 2016, up +12.8% organically, representing 5.7% of the Group’s revenues. Initially based in France and to a lesser extent in Germany, the business was expended to most of the geographies with an increasing contribution from the private Operating margin was € 111.9 million, representing 16.8% of revenue. The Division managed to keep this high level of operational profitability while focusing on top line in order to benefit from the growing market demand. Worldline ’s contribution to the Group’s revenue in 2016 was € 1,261 million, growing organically by € 45.5 million or +3.7%. Merchant Services & Terminals grew by +7.4%, thanks to a double digit growth in Commercial Acquiring in Benelux and also e-Ticketing, in contact and connectivity solutions and in services with governments. in India and Central Europe and to the dynamic of payment terminals. Revenue in Financial Processing & Software Licensing grew by +4.8%, driven by more transaction volumes and customer projects. Lastly, revenue in Mobility and e-Transactional Services declined by -2.3%; while revenue was impacted by the termination of two historical contracts, the Business Line managed to successfully sell its offerings in improvement was recorded mainly in the Merchant Services & Terminals Business Line, thanks to growing volumes and a favorable pricing mix mainly in Belgium, as well as a margin improvement in the UK on private label cards contracts. Increasing volumes in card processing supported the operating margin of Financial Processing & Software Licensing while the Business Line continued to invest in security infrastructure. Mobility & e-Transactional Services new business almost Operating margin was € 196.9 million, up +130bp. This offsetting the two terminated contracts was generated with a lower operating margin. Business Units” contributed to the Group revenue organic growth: In 2016, Germany, North America, Worldline, France and “Other Germany confirmed its recovery with +5.3% organic growth, • turning back to healthy growth in all Divisions, with a strong organic growth, notably thanks to new major deals won in Infrastructure & Data Management and strong actions undertaken in Business & Platform Solutions by the new management;

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Atos | Registration Document 2016

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