Worldline - Registration Document 2016

9

Operation and financial review Overview

9.1.2.7

9.1.2.9

Geographic Footprint

Changes in Scope [GRI 102-45] and

[GRI 102-49]

global business lines structure and its increasingly integrated and standardized IT platforms. throughout the markets where it operates, leveraging its new Although the Group provides services across the extended payment services ecosystem, it currently does not generate revenue from its full range of services across each of its principal jurisdictions. As part of its strategy, the Group intends to gradually expand the geographic footprint of its services Although most of the Group’s revenue is currently generated in its core historical markets in Europe (approximately 91% in 2016), November 8, 2016. payments are significantly higher in emerging markets, notably in India, where the Government has put in place a strong policy to promote non-cash payments, notably through the demonetization of 500 and 1000 rupee bills decided on further international growth. While penetration rates in the Group’s core markets in Europe still show room for growth, growth rates in adoption of card-based and other non-cash the Group is earning an increasing proportion of its revenue from emerging market countries in Latin America and Asia. The percentage of the Group’s revenue generated in emerging markets in Latin America and Asia was 9% in 2016, and this percentage is expected to grow over time as the Group pursues slowdown in some of the Group’s e-Government contracts that have lower volumes during holiday periods. of year holidays, is the Group’s highest revenue quarter, and the first quarter of the year, when new projects are often in their early phases, usually shows the lowest revenue. The effect of the end of year holiday season is offset to some extent by a Although the Group’s operations typically do not show strong seasonal variations, the fourth quarter of the year, which is favorably affected by higher shopping volumes during the end significant period-to-period fluctuations at the consolidated level or in a particular global business line or business division. In particular, given the front-end nature of build revenue and the lower While the Group’s results do not typically show strong seasonal to period to period fluctuations, including non-renewals of associated profitability of the build and early ramp phases of a project, a greater or lesser proportion of build revenue from one period to the next can have a significant impact on revenue and profitability. A range of other factors could cause or contribute variations, the Group may experience Seasonality and Period to Period 9.1.2.8 Variability

2016, following the consolidation of Equens, Paysquare and KB Smartpay as detailed in Section 9.3, “Significant events of the year”. The Group’s scope of consolidation could further evolve given its external growth strategy. The Group’s scope of consolidation has evolved significantly in

9.1.2.10

TEAMand TEAM² projects

industries in which the Group operates, improve resource allocation and standardization across its network, and take full advantage of the Group’s size and global reach. Through TEAM, the Group leveraged “continuous improvement” initiatives already begun as part of Atos’ similar TOP Program, such as lean management and improved purchasing efficiency, while implementing new “efficiency through transformation” initiatives aimed at increasing the Group’s production volumes, enhancing the Group aims at improving its operating model, reducing costs and leveraging its resources and strengths across the Group’s business to benefit from the strong growth in the markets and efficiency, industrialization, and standardization program whose underlying objective was to extract the full value and potential of the Group by improving the efficiency and integration of all of its component activities, globally. Through the TEAM program, the globalization of its business, and integrating and standardizing the Group’s IT infrastructure. million of cost saving by the end of 2017, was realized as soon as in 2016, by capturing the productivity gains and by finding additional leavers, which allowed compensating the price decreases requested by clients. The TEAM program, which had an objective to generate € 150 Given the good results of this program and the strong internal mobilization that it has created to deeply transform the Company, a new TEAM2 program has been launched early 2017. This new program covers the next 3 years with an ambition In early 2014, the Group had launched “TEAM”, a four-year improvement opportunities, while introducing new workstreams centered around transformation and innovation of our core business. workstreams. TEAM2 pursue the initiatives that have proven successful over the long term and where there is still potential similar to that of the first TEAM program, but incorporating news The initiatives Lean, Purchasing, Real Estate, Contract profitability and Workforce management have been taken into consideration in the TEAM2 program for the next 3 years, with the objective to continue progressing in terms of performance and operational efficiency: expert task forces to implement remediation processes when necessary; existing projects and contracts through improved monitoring of contract performance and by mobilizing Contract profitability. Further enhance the profitability of ●

contracts or the end of life of a terminal product.

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Worldline 2016 Registration Document

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