Two years after its formation by merger, the French number three IT services firm Atos has stated that it aims to derive at least half its revenue from outside France before 2001. In the financial year ending September 1998 a good two-thirds of Atos revenue came from domestic contracts with trade in its other major markets of Germany and Italy running at just 11% each.
There’s every likelihood that its business in the Italian market will pick up substantially following the October 1998 acquisition of Italian applications maintenance service provider Sesam, an acquisition that doubles the size of Atos’s Italian operations. A former joint-subsidiary of Fiat and Digital, the deal included a five-year applications maintenance contract with Fiat. Another move likely to increase its presence is the announcement in February 1999 that Atos is to team up with French systems integrator, Steria SA to work on Euro interbank systems. The 60/40 joint venture, dubbed Diamis SA, follows three years of collaborative work on interbank and clearing systems.
Atos was formed in May 1997 from the merger of two IT services companies, Sligos (with a history in French banking – Credit Lyonnais) and Axime. Currently its client list includes such notables as American Express, Groupe Metro, Banque Sofinco, Hachette, HFC Bank, Berliner Bank, Societe Generale and Credit Lyonnais.
Financials for the first quarter 1999 ending December 1998 show revenue up 14% to 180m pounds ($291.3) from figures for the same period 1997 reported at 157.8m ($255.4m). Comparison with earlier trade figures is difficult: results for the financial year 1997 refer to continuing businesses only and excludes revenue from divested businesses and takes in revenue from acquisitions made in financial year 1998. For the financial year ending September 1998, consolidated revenue was reported as being 645m pounds ($1,043.9m) representing a 17% rise on the previous year’s total. With operating income for the financial year ending September 1998 recorded as 60.2m pounds ($97.3m), Atos recorded a rise in its operating margin to 9.1% up from 7.9% for the previous year.
In the financial year ending September 1998, its employees increased by 8% to 9,453 from 8,742 for the previous year. Acquisitions added some 512 people to this figure almost equalling the 540 staff reduction due to company disposals. The company says that around 1,000 employees were hired to cope with organic growth. Overall Atos reports a staff turnover rate of 13.7% for the financial year 1998. In its system integration division, including its ERP business unit, Atos employed 4,712 mostly IT professionals at the close of the year, representing a rise of 26% on the previous year. Some 14% of this rise in staff numbers is reported as being due to organic growth while 12% resulted from acquisitions.
Breaking these figures down by country gives an indication of how far Atos is from achieving its aim. These show that by year-end 1998 Atos had 6,068 employees in France and 896 in Germany. These numbers are approximately the same as for the previous year. Similarly in the UK the number of employees increased to 366 following a seven-year, 90m pound ($145.5m) contract with Co-operative Retail Services. In Italy the number of employees doubled to 1,086, a rise accounted largely by its takeover of Sesam. In Spain the number of employees rose to 892, a 36% jump.
The group as a whole divides its activities into four main divisions – services, outsourcing, multimedia and systems integration. The Atos Services Division sells payment services and help with customer relationship management processes. In its payment services unit Atos offers electronic payment processing, card processing, online payment systems, interbank transfers and electronic purse systems. Typically contracts here will involve corporations serving several hundred thousand customers. It also provides for document management services such as check clearing and interbank payment tickets. The payment services section is Atos Services Division’s largest business unit. In fiscal year 1998, the payment services unit accounted for 94.7m pounds ($153.1m) in revenue representing approximately 15% of Atos’s total revenues for the year. The unit’s main clients are banks and other financial institutions.
Its customer relationship management services include the provision and maintenance of call centers (handled by 1,000 permanent operators across France), management of loyalty programs and marketing databases. In electronic commerce Atos offers expertise in authentication, payment guarantees, e-commerce security surveillance as well as the administration of ticketing and value-added services for the leisure and entertainment industries.
Its multimedia division specialises in helping content providers distribute information to customers and prospects using access channels or networks such as the Internet, intranet, videotext, interactive voice response (IVR), satellite and mobile telephone networks. Atos undertakes online systems design, integration and hosting services.
Atos has not got distracted into short-lived Euro and Y2K bug fix work and seems to prefer bidding for high added-value e-commerce ventures. In March 1999 it announced that it had been selected by SGCI Planfax, a multimedia map provider, to create and host an Internet service that will allow companies to indicate the location of their sales outlets on a digital map. The maps can also be printed or emailed directly to clients. The announcement follows quickly on Atos’s successful completion of a contract to integrate the Palm III as a service for accessing the multimedia online trading services offered by Societe Generale’s online trading subsidiary Fimatex. Hosted at the Atos server center in Seclin, the Planfax site offers extended search functions using an integrated full-text search engine combined with the Sybase relational database management system. Atos integrated the Geographic Information System (GIS) published by ESRI France and developed the web interface. Taken together the company claims the two contracts signal Atos’s desire and ability to meet new e-commerce challenges head-on.
The outsourcing division operates, manages and upgrades all or part of its clients’ IT systems. Services here include the design and installation of new systems, maintenance and upgrading of existing applications and the management of anything from data centres, to desktop assets and networks.
With its system integration division Atos offers consulting, design, development, installation and maintenance of IT systems as well as providing training for end-users. The division has consultants specializing in datacommunications, datawarehousing and object-oriented programming. For the financial year ending September 1998 Atos reported revenues for its systems integration division of 283.5m pounds ($458.5m) representing a rise of 33% on the previous year. Some 18% of this total is said to derive from organic growth while 15% results from the acquisition of Sesam.
