(By Anthony Miller). Atos Origin released its ‘full monty’ 2008 results today adding colour and movement to early Feb’s revenues preview (see Atos UK grows 6% in final quarter). Excluding disposals, group margins crept up 30 bps to 4.8% though reported margins fell 50 bps to 1.8%. Regional margins were very much a case of swings and roundabouts. UK margins rose from 5.7% to 7.3%, and France was also up from 4.4% to 4.9%. However, Margins in The Netherlands really got hammered – falling from 11.8% to 8.5%, while Germany also fell, from 7.4% to 6.7%. Margins in the Americas added 10 bps to make 3.0%.
Compared with Capegmini's results (see table), I’d have to say it’s not easy to pick out obvious country trends, though Capgemini’s margin superiority across the board really stands out. Perhaps this is why Atos also announced a reorganisation, putting greater management focus on better integrated global operations (and see my comment on just this challenge in UK now leading Steria’s growth). The trouble as I see it is that Atos’ “TOP” programme (Total Operating Performance) – which is their version of Capgemini’s “I3” initiative, (as in Industrialisation, Innovation, Intimacy) - looks a bit complicated to manage, with its “four transformational levers supported by twenty transversal initiatives”. It also concerns me that service process industrialisation and offshore delivery appear to have a much lower focus in the Atos programme than in Capgemini’s (or, for that matter, even than much smaller Steria). My current understanding is that Atos has some 4,000 FTEs in its global delivery network (about 8% of its 50K global workforce) of which ~3,000 are in India. Capgemini, on the other hand, has over 25% of its global workforce offshore, with some 20K of those in India.
Anyway, Atos is expecting 2009 revenues to be slightly lower than 2008 (at constant currency) but aims to boost margins 50-100 bps, mostly in H2. The former is to be expected – the latter will be a challenge.
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