It must be smiley faces pretty much all round at Atos, with management making good on its forecast a year ago to boost margins while adding a tad to the top line. The ‘tad’ was just under 1% (at constant scope and exchange rates) to €8.84bn, while the ‘adjusted’ operating margin improvement – from 4.8% in 2011 to 6.6% in 2012 – beat management’s target by 10bps. However – and it’s a big ‘however’ – statutory operating margin declined by 80bps to 4.3%. The ‘delta’ is mostly related to the acquisition of Siemens IT Solutions & Services (see here); please, let’s never forget that acquisitions, restructuring and reorganisation is just part of doing business.
And it was good news on the local front, with UK CEO, Ursula Morgenstern leading the unit for her first year in the top job to 7.5% higher revenues (€1.68bn, c.£1.37bn) and improved margins (7.0% vs 6.1%). Morgenstern has been on a roll since taking over from Keith Wilman, seeing the UK unit hit double-digit growth in Q3 (see here).
But the really big news was the announcement that Atos is to carve out its payment processing and merchant transactional services by the middle of the year. The new unit is expected to slice off some €1.1bn and €165m of operating profit – indeed, at 15% (adjusted) operating margin. This is by far the most profitable part of Atos’ operations and on a pro forma basis would leave Atos with a 5.4% adjusted operating margin on revenues of some €7.75bn. Atos chairman and CEO Thierry Breton is aiming for a 7.5% adjusted operating margin in 2013 on ‘slight’ top line growth excluding the effect of the carve-out.
More after we have spoken to Ursula Morgenstern later this morning.