Monday, 19 October 2009

Atos UK update

(By Anthony Miller – Monday 19th October 2009 9:30am). I’ve just been speaking to Atos UK CEO, Keith Wilman, about the Q3 results (see Atos UK star shining even brighter). Despite the cracking growth, Wilman remains cautious on demand both in public sector – where large deals are still being delayed – and in the private sector, where bids are continuing but at lower contract value. Wilman sees particular risk that public sector deals pushed beyond the end of the year may end up being postponed until after the election, which bodes for a rather quiet H1 for all vendors with skin in that game.

On the Consulting front, Atos is seeing some renewed activity, mainly around supply chain cost reduction A few customers are also starting to take a closer look at ‘nextgen’ technologies such as Web 2.0 and Cloud. But with the scarcity of consulting projects, competition is fierce, with some vendors bidding “eye-watering” pricing to win the deal.

The fastest growing part of Wilman’s business looks to be on the BPO side, where ‘output-based’ processing – such as Atos Worldline and Medical BPO – now comprises 22% of Atos UK revenues. Today’s announcement of Atos’ new supermarket fuel card looks set to push this percentage much higher. This will be good news on margins – once volumes have ramped. Indeed, Wilman hinted that Q3 margins were pretty much in line with H109 (8.2%), so perhaps this could be pushed even higher.

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