Elie Girard: Hello, everyone, and thank you for being with us this morning for our conference call on the full year results of 2020. Of course, I hope you and your closest ones are doing well and keeping safe. I will first go through the 2020 overview and the 2021 objectives and then dive into the 2020 highlights, then Uwe will develop the financial performance of 2020. After my conclusion, we will open the floor to your questions, as usual. Pierre Barnabé, recently appointed Head of Manufacturing on top of his responsibility as Head of Big Data & Cybersecurity as well as Adrian Gregory, our Head of Financial Services & Insurance and Head of Atos Syntel, are with us this morning to answer your questions.

So let's start on the next slide. 2020 has undoubtedly been a year of significant achievements. We have met all our annual objectives, which I remind, have been set as early as April 2020, well before anyone imagined there would be a second and a third wave of COVID with all associated restrictions. This highlights the resilience and the relevance of our business model and the continued volatility of the environment as many of our customers across all geographies were facing multiple waves of the COVID crisis throughout 2020. As importantly, 2020 was the year along which we built the foundation for our growth agenda that we announced to you last year.

We implemented the first 2 steps of our SPRING transformation, which consists imprinting our customer obsession culture in our operating model through the verticalization of our portfolio of offerings, our go-to-market and our organization. We also prepared for step 3, which is the last step, being rolled out right now. As part of SPRING, we reshaped our offering towards more digital, more cloud, more security and more decarbonization for our customers. In particular, we launched Atos OneCloud, our powerful one-stop-shop initiative to proactively accelerate our clients' migration to the cloud. This is having a tremendous echo, an impact on our customers and partners.

We also announced a few days ago, a very promising partnership between Atos OneCloud and RISE with SAP to migrate business-critical workloads of customers to the cloud. Regarding decarbonization, our offerings find a resounding interest from our customers with several signatures already in 2020 and already a large pipe for 2021. SPRING and all the connected initiatives have created a phenomenal response from our customers and accelerated the commercial momentum throughout the year. This has resulted in a record high order book as well as a record high pipeline of commercial offers. Our book-to-bill ratio reached 119% on the full year, of which 130% in Q4.

Our pipeline is 23% higher now than 12 months ago. And our full backlog at the end of the year was at €2 billion and stands at €23.7 billion. In that regard, it is noteworthy that our backlog deliverable in 2021 increased by circa plus 8% compared to the backlog for 2020 as of a year ago which is a great signal for our growth prospects for this year. Last, but not least, we acquired 10 companies in 2020, all within the digital, cloud, security and decarbonization areas and is full consistent with our self-funded M&A strategy as part of our growth agenda representing a total yearly revenue of more than €300 million based on 2019 figures. Before going into more details on the 2020 results, together with Uwe, I would like on the next slide to turn immediately to 2021.

We will deliver in 2021 a very important milestone of our growth agenda in midterm plan. First and foremost, there is a clear dynamic within Atos to achieve our transformation towards much stronger growth. The high level of commercial activity I just described will definitely support the return to growth in 2021 as soon as Q2 in organic terms. On the full year, at constant currency, our objective is plus 3.5% to 4% growth. Operating margin objective is an improvement versus 2020 by 40 to 80 basis points.

Free cash flow objective is €550 million to €600 million. These objectives will be supported by the acceleration towards digital, cloud, security and decarbonization as the backbone of our strategy with a further improvement from 46% of the revenue in 2020 on the way to 65% midterm. Furthermore, we will pursue the reprofiling of the group through self-funded bolt-on acquisitions as we did in 2020. As stated in 2020, when announcing our midterm strategy and has repeated many times since then, we keep optionality for larger M&A, should we find the right opportunity in a context where the group is not leveraged. Now I know that there are many questions about our commitment to the midterm strategic plan, especially regarding potential large M&A, and I'd rather address them upfront.

I want to be crystal clear on this. My commitment, the management's team commitment as well as the Board's commitment to this plan is unwavering. We will not make any move that might lead us to compromise on our midterm objectives and especially our growth agenda. I repeat, we will not make any move that might lead us to compromise on our midterm objectives, especially our growth agenda. Does this mean that we will stop carefully reviewing and assessing potential opportunities? Absolutely not.

But considering an opportunity is not the same as deciding to move forward, and we will communicate to investors in due course once we have been able to fully ascertain such opportunities and fully validate they can support our midterm plan. What are the type of sizable acquisitions that we could consider? Again, our decision-making process, and ultimately, the choice to move forward or not will be made within the strategic framework we laid out and that was approved by our shareholders. Can we be more specific about the type of targets, segments, geographies that we will be targeting? Unfortunately not. This is an intensely competitive market, and we don't want to show our hand more than we have to. But again, we will not deviate from our strategic framework.

By the way, and to be more specific on DXC. The fact that we expressed interest in DXC was communicated at such a preliminary stage only because there were media reports, and we had to confirm the information from a legal perspective. None of this should have ever been public at this stage. Now what happened? We looked at DXC on the basis of public information. We made an initial approach, we received additional information and we decided not to pursue.

It is as simple as that. And let me repeat once again that any potential transaction we would execute in the future would have to be supporting our strategic plan and in particular, our growth agenda, certainly not make us step back. With this overview, let me now turn to the call of the presentation. Let's move to the Slide #8, where you can see the key figures of 2020. Revenue at minus 2.3% at constant currency and minus 3% organically.

After Q2, which was the craft of last year's revenue profile at minus 4.8% organically, revenue improved both in Q3 and Q4 despite the second lockdown. This is the profile we roughly anticipated as early as April when we provided our guidance for the year. Indeed, the very balanced group mix across industry, geographies as well as business segments allowed to mitigate the effect of the pandemic, where the demand more than the supply was affected. Indeed, most of our staff have been able to work remotely very efficiently all along the year. That was for revenue.

OMDA rate reached 14.9%, showing also resilience with only 70 basis points less than in 2019. Operating margin reached 9%. The low labor flexibility did not allow to adjust fully the cost structure in the large Continental European countries where we operate. However, we launched a huge cost saving plan, which started in March last year, and we performed it all along the year. With Uwe, we consider that half of the costs saved are recurring.

In the current context, these strong actions to monitor cost are pursued this year on all the categories, and the group is well-structured and prepared having the track record to successfully perform them. Headcount was 104,000 at the end of 2020. Last year, 1,800 staff joined the company through the acquisitions closed. After a decrease of staff all along the year, we are now ramping up resources in many domains, either through hiring or in some cases through subcontractors to fulfill demand. Net income was €550 million, including several one-off items related to Worldline.

In particular, in February last year, we sold our remaining shares in Worldline, except, of course, the 3.9 -- the 3.8%, we still own underlying our optional exchangeable bond. Normalized diluted EPS reached €6.65 per share. Free cash flow reached €513 million. As expected, we caught up as we were late at the end of H1. The teams have made a very good job.

As in H2, we generated almost €700 million of free cash flow despite the environment you know. Net debt, reached €467 million, which includes €500 million for the optional exchangeable bond. As we still own the corresponding Worldline shares, one can assume that the company was actually debt-free at the end of December 2020. On the basis of these resilient results, the Board of Directors will propose to the next AGM to resume the group dividend policy to pay between 25% and 30% of net income group share into dividend and will propose for the year 2020 to pay a dividend of €0.90, representing 29% of payout on the basis of the net income group share adjusted from the onetime effects from Worldline. Let's now move to the next slide.

I said that 2020 has been a record high bookings. It is not only a matter of book-to-bill, which has been strong over the year, leading to 119%. It is also a great satisfaction that this performance has been very sustainable as each and every quarter was better than the year before. This result is for me the first very tangible result of our SPRING transformation. Year-on-year, the main contributors to the plus 10% growth in terms of bookings were, by industry, financial services and insurance and public sector and defense; and by geography, North America and Northern Europe.

Let's talk about the deals now on the next page. During the fourth quarter, the main deals won included large projects or multiyear contracts in most of

the industries: in cloud, in digital workplace, in digital projects, in big data, in decarbonization, in cybersecurity and in unified communication and collaboration. Among others, I would like to mention a contract with Handicare, a large digital project to implement and to modernize technology platforms; a large deal in the U.K. with National Employment Savings Trust to build a cloud platform with low carbon solution; and NHS, where we will design, implement and run the electronic health record system. The group also signed a large digital workplace contract with WINDTRE in Italy, also not in this slide, the second part of our contract with Deutsche Bank.

In North America, resources and services expanded the contract with Goli, a customer experience contract involving edge computing, artificial intelligence and connected IoT machines. Finally, we signed in the Netherlands, in the defense sector, a very large deal through a consortium to implement a digital and IT, modern and flexible system. Moving to the next slide regarding the critical steps we achieved in 2020 on the innovation front. Here also to build our journey towards our midterm ambition. You have here the most important ones, but for the sake of time, let me please focus only on very few of them.

I talked already about the Atos OneCloud initiative. I absolutely want to underline EDGE as this disruptive technology where Atos is already a leader worldwide, has really taken off in 2020 with a very significant pipeline for 2021. By the way, I really invite you to spend time on EDGE because this is becoming a large part of this industry's future. In cybersecurity, thanks to our recent acquisitions like Paladion, Atos reinforces its event detection and response managed services with embedded AI to counter the increase of scale and sophistication of unexpected cyber attacks. This is where Big Data meets cybersecurity to drastically improve our customers' protection.

Ambitious plans on quantum technologies have been launched by several institutions and governments around the world, in particular, in France and also in Germany, backed by important investments, which will allow to accelerate in this field. Atos is, as you know, very strongly positioned to boost quantum in its real-life applications. Finally, Atos developed AtoZero, a decarbonization framework in 5 steps to help customers through their transition to net 0. Our EcoAct acquisition is obviously a fantastic booster of this strategy. I would like now to highlight some nonfinancial figures on the next slide, as these indicators also drive the performance of Atos.

I start with customers. In 2020, we significantly improved the Net Promoter Score which measures our customer's satisfaction. It is for me one of the most important KPI, of course. At 65%, I am convinced that a closer link with our customers through the implementation of SPRING transformation supported that. Last year, we have once more reduced our own carbon footprint, also contributing to the decarbonization of our customers.

Under famous Scopes 1, 2 and 3a, we emitted 15.4 tonnes of CO2 per million euro of revenue, 27% less than in 2019 and 50% less than 4 years ago. Out of these -- out of the decrease by 27%, half came from COVID and half has been performed structurally by the strong program implemented by the group to accelerate the reduction of CO2 emissions. Please note that Atos was clearly already quite low versus competition. On the supplier side, 63% of them are now covered by EcoVadis, a sharp increase versus 2019. This is a clear indicator that we work with large suppliers, which are certified reducing the level of risk of this topic.

This is a clear advantage when we answer to tenders. By the way, Atos was assessed by EcoVadis along the top 1% as a supplier and rewarded with the platinum status. We accelerated again on digital training for Atos engineers with a record high number of digital certifications delivered in 2020 above 85,000 after having crossed the 50,000 milestone in 2019. Next one, I'm very proud of, especially in this period, we enhanced employee experience and we reached a higher level of engagement at 65% in our yearly all employee Great Place to Work assessment, with, again, an increasing number of participants at this assessment close to 70, 7-0, percent of all employees. Here also, Atos remains among digital industry best-in-class.

In terms of gender diversity, with 30% of women in executive positions, we achieved a big step last year. This figure is the same on total staff and were towards the high end of the industry. As an example of action we're undertaking, we have implemented a system where we're using artificial intelligence to remove gender bias in our job offers. Let's move to my last slide on our net-0 ambition. In 2020, Atos aligned its carbon emission reduction target with the most demanding objective of the science-based target initiative, SBTI, which aims to keep global warming at 1.5 degree.

This means that we expanded our Atos decarbonization program not only to the CO2 emissions under our control, data centers, offices, travels, but also under our influence, the supply chain of all the products we sell to our customers. This full scope that is called Scopes 1, 2 and 3a and 3b is more than 10x wider and represents currently around 3 million tonnes of CO2. These full emissions, we now commit to dividing them by half by 2025 instead of 2030, 5 years ahead of the most demanding recommendations of the SBTI. We're very confident to achieve such performance, given our decarbonization track record having achieved a reduction of 50% emissions under direct control in the past decade already. Now while Atos is already carbon-neutral for the emissions under our control, I am really glad to announce to you today that we also commit to reaching net-0 carbon emissions by 2028 instead of 2035 previously, 22 years ahead of the Paris Agreement.

I insist, this is under full Scopes 1, 2, 3a and 3b. With this, I conclude my overview and highlights and now hand over to Uwe. Uwe, the floor is yours.

Uwe Stelter: Thank you, Elie, and good morning to everybody. Nice to be with you today.

I will go first on the main financial items of 2020, and then I will provide you a perspective for 2021 on the road to execute our midterm plan. On the next slide, you can see the financial overview. This is the fact sheet with the main financial KPIs, and I'm going to detail each of them over the next slides, starting with revenue and operating margin than to OMDA, we will look at the income statement, how free cash flow was generated and what it means for net debt at the end of 2020. But before going to revenue, let's take a look on the development of our backlog over the last quarters. As a result of our record-high bookings, full backlog increased by almost €2 billion, up 10% year-on-year.

In addition, the backlog at January 1, 2021, for revenue this year in '21 is plus 8% compared to the same figures last year, representing circa €600 million more backlog. The €3 billion of the site extension with Siemens are excluded from these figures. Let's move to the next slide on the evolution of our business mix. In 2020, the group has made solid progress towards its midterm targets to increase the revenue share in cloud, digital, security and decarbonization to 65%, coming from 40% in 2019. The share increased in 2020 by 6 points to 46%.

In addition, more than 70% of our current sales pipeline at the end of 2020 was exactly in this area. This is a very good signal that the organization is actually selling the right portfolio. The acquisitions made in 2020 are clearly reinforcing this trend. Let me cover those acquisitions on the next slide. In line with its midterm plan, the group completed 10 acquisitions in 2020, all of them are in the targeted areas of the group for bolt-on acquisitions.

First, digital through the acquisitions of Miner & Kasch, Alia Consulting, Eagle Creek and SEC Consult. Cloud, with the purchase of Maven Wave and Edifixio. Security, with the acquisitions of Paladion, digital.security, SEC Consult and Motiv. And lastly, decarbonization with the reinforcement coming from EcoAct. The 10 acquisitions have been all self financed.

They represent a total revenue on 2019 above €300 million. On the next slide, let's look at the operational performance by industry. First, manufacturing reported a decline of 9.6% organically, but coming from minus 14.8% in Q2. The industry was impacted by COVID in automotive, aerospace and industrial services sector, especially in Southern Europe, North America and Central Europe. But has partially compensated the margin impact from those lower volumes, but also had higher costs in difficult contracts in the first half of the year.

Margin, therefore, closed at 3.3%, well below the group average. Financial service and insurance revenue was minus 3.6% organically and minus 2.5% at constant currency, improving significantly from 6.1% minus in Q2. The industry successfully ramped up a large insurance contract in the U.K., but was also impacted by several banks postponing discretionary spend. Operating margin was 12.3%. Despite lower revenue generation, industry benefited from strong contribution of the Syntel activities and cost synergies.

On Public Sector & Defense, the growth was 7.5% organically. This performance was driven across the geographies and the strong demand for high-performance computing solutions and digital transformation projects. Operating margin reached 10.1% of revenue, stable versus previous year. Telecom, Media & Technology, revenue declined by 5.3% organically, minus 3.7% at constant currency. The decline was caused by the legacy unified communication and collaborations business and new cloud solutions not fully offsetted this legacy erosion.

Operating margin improved by 70 basis points versus previous years, thanks to cost actions. Resources & Services declined by 8.7% organically. Inside this industry, Energy & Utilities generated growth, particularly with digital workplace solutions and with new Big Data projects. The situation with customers operating in retail and transportation was more challenging in the context of COVID. Operating margin reached 7.4%.

The margin was strongly impacted by the revenue effect in the subindustries, transportation, hospitality and retail. Healthcare & Life Sciences revenue was grown by 0.7% organically, plus 1.4% at constant currency. It benefited from the ramp-up of digital and Big Data projects in many of its clients. Operating margin at 12.4% was roughly stable with previous year. The next slide shows the most -- that most of the geographies recovered in 2020 progressively quarter-by-quarter, with demand picking up for our Digital Workplace Solutions, Cloud Transformation, Big Data & Security Projects.

North America landed at minus 6.1% for the year, but at constant currency, North America declined only by minus 2.2%. The cost action plan implemented in Q2 have well mitigated the revenue, in fact, in most of the geography. The situation remained challenging in Central Europe due to the lack of flexibility in labor costs as well as some one-offs on difficult contracts in the first half and effects from reorganization kicking in later. On the next slide, you see the development by division. Infrastructure & Data Management revenue proved to be resilient at minus 3% organically and minus 2.1% at constant currency.

Business Platform & Solutions was most impacted by COVID, was down by 7.9% organically for the year, but improving progressively since Q2. And Big Data & Cybersecurity continued to grow very strongly at 15.8%. The next slide shows that the cost program initiated back in April, right at the beginning of the crisis, has reduced resource costs by circa 2%, travel cost by circa 70% and other nonpersonnel costs by circa 2%. Many of those measures have structural impacts and will deliver continued savings in the future, as indicated on the right side, while an additional focus is on hiring the right employees to support our growth agenda. On the next slide, I'd like to give you an update on the Syntel synergies.

As a reminder, we targeted back at the time of the acquisition in 2018, to deliver revenue synergies at USD 250 million run rate per year, end of '21, with half of that to be reached end of 2020. With all deals signed so far, we achieved actually a run rate for 2021 of USD 300 million versus the €250 million target. Those synergies include contracts we would not have signed without Syntel, either cross-selling into Atos or Syntel clients or selling together into new customers. On the margin side, we reached in 2020, $90 million run rate versus the USD 120 million target to be achieved for 2021, means we are on track. In the $90 million, $20 million came from real estate, G&A and procurement savings and $70 million for margin improvement on the contracts transferred to Syntel.

Moving on to the income statement. As the Worldline transactions, both the sales of shares and the optional exchangeable bond impact multiple lines in the income statement, we have explained those effects on the right side. I will not go through them now, but happy to answer any questions on this later. Adjusting for those Worldline effects, the net income group share is €343 million in 2020, which is also the base for the dividend payment mentioned by Elie of €0.9 per share proposed by the Board of Directors to the Annual General Meeting. Important to note as well the evolution of the reorganization, rationalization and integration costs at 1.8% of revenue versus the 2% we communicated at the Analyst Day in June for the adaptation of the workforce in several European countries, but more particularly in Germany.

With the finalization of the Syntel integration costs and the completion of the Germany program in '21, this will go below 1% of revenue starting in 2022. Before going to free cash flow, please let me move to our first time implementation of a carbon adjusted earnings per share. The CO2 emissions are valued at €20 per tonne. 2020 versus 2019, we decreased emissions by almost 15% on the Scopes 1, 2 and 3. This translates to €10 million CO2 cost reduction and improves the carbon adjusted normalized diluted EPS by €0.10 or 1.5%.

Let's go to free cash flow, which reached €513 million in 2020. Main points to highlight are change of provisions is close to 0 in 2020, indicating a better profit quality. CapEx is stable at 2.9% of revenue. Third, Reorganization, Rationalization & Integration cash out together are 1.7% of revenue. And the cost of net debt decreased to minus €33 million compared to minus €64 million in 2019, thanks to the repayment of a €600 million bond back in April.

Leading us to the net debt slide. M&A activities led to a net payout of €470 million. The disposal of the Worldline shares was €1.4 billion cash in. Including share buyback and foreign exchange effects, the net debt is €467 million, assuming the full conversion of the optional exchangeable bond, the group was net debt-free at the end of 2020. On the next slide, the total headcount was 104,430 at the end of December 2020, down by 3.6% compared to December 2019.

During the year, the group welcomed more than 1,800 new employees from acquisitions. I would like now to come to 2021 and put this in context with our midterm targets communicated during our Analyst Day in June 2020. The '21 revenue objective of 3.5% to 4% at constant currency includes circa 2% from self-financed M&A on our way to reach 5% to 7% midterm. On operating margin, we target to do a significant step in 2021 towards returning back to pre-COVID level in '22. Finally, free cash flow, we target €550 million to €600 million.

I will show a bridge in a few minutes how to get there. But first, start with the margin bridge. The 40 to 80 basis point improvement from 2020 to 2021 is a result of the levers shown in this bridge. The main

ones are: first, the salary increase will be offset by workforce and pyramid management; second, price erosion, which is mainly the price per unit decline in the infrastructure and application management areas is considered in this bridge; business mix as a result of higher share of Cloud, Digital, Security & the Decarbonization business is contributing with higher-margin to the overall group margin; fourth, the project margin improvement covers the turnaround of lower-margin contracts; fifth, the offshore increase of our overall delivery by circa 3% in 2020; and lastly, the reduction of high-priced subcontractors and procurement actions. Let me conclude with the free cash flow bridge to 2021.

OMDA improvement represents circa €100 million cash flow from recent acquisitions, circa €10 million and €20 million from CapEx reduction. The reorg rationalization and integration expense will increase by €40 million due to the completion of the Germany program by circa 40 million. The expense will increase by €40 million due to the completion of the Germany transformation program. Overall, we will stay within the 2% of revenue envelope we communicated back in June 2020. And tax is expected to increase by circa €25 million based on the increased profit.

Thank you for your attention, and back to you, Elie.

Elie Girard: Thank you, Uwe. Before leaving the floor to your questions, I would like to summarize my main priorities for the group in 2021. First of all, 2021 is a year of return to revenue growth. We expect it as soon as Q2, not only with the base effect from last year, but also to the materialization into revenue of several contracts signed in Q4 and in Q3 last year.

In that context, my second priority is to keep the sales momentum and to maintain the high-performance level of 2020. Third, after a year, when we had to implement new actions on both cost to mitigate the effect of the pandemic and cash, we will benefit from the recurring effect of some of them. We will then focus on additional structural actions on both costs to improve profitability and cash to increase the conversion to free cash flow, one of our midterm targets. The fourth priority relates to the improvement of our business mix with all what I mentioned today for digital cloud security and also decarbonization, these areas are also supported by our acquisition strategy, as I explained. Finally, we reach new steps in ESG domains.

These topics are definitely part of our strategy, shared by all our employees for the benefit of our customers and obviously, our shareholders. Thank you for your attention. With Uwe, with Pierre and with Adrian, we are now happy to answer your questions.

Operator: [Operator Instructions] First question is from the line of Amit Harchandani from Citi.

Amit Harchandani: Amit Harchandani from Citi.

Two questions, if I may? Firstly, with regards to the comments you made, Elie, earlier about your commitment to transformational M&A within the framework of the growth strategy. Clearly, as you acknowledged, DXC leaked out much more earlier than it should have and you reiterated your commitment. But in terms of that lens, when you are screening for targets, are you willing to still look at targets where maybe the ambition with regards to returning to growth might happen in a later time frame than maybe what you outlined to us back in June 2020? Because clearly, with DXC, while we also saw the public information that you saw, the impression was that the return to growth might be pushed out even if it did materialize. So keen to dig deeper into the thought process, if that's okay? And more importantly, how would you think about reaching your targets if the opportunity in front of you is not necessarily immediately ticking the growth agenda? So that would be my first point. If you could elaborate on that.

And the second question, if I may? Looking at the price erosion dynamic, which clearly seems to be weighing in on the margin trajectory in 2021, and indeed, when you gave us the targets back in June 2020. If you could give us a sense for how do you plan to offset it? With the DXC move, for example, it seems like you are looking to leverage economies of scale. But I'm keen to understand how do you think of offsetting this going forward? Would you be looking to shift more to applications business? Would you be looking to potentially take some further cost measures? So any thoughts around offsetting price erosion as we move forward would be helpful?

Elie Girard: Hello, Amit, and thank you for your questions. Uwe will answer the second question, but the plan to compensate every year for the price erosion, which has not accelerated, by the way, it is still there. It will still be there in the next years, but with no acceleration.

The plan is fully organic. All the levers that Uwe started to present in his introduction, but he will come back to this, Amit. On your first question on the -- again, I want to be clear, I'm not in the mood or the spirit to come with a large acquisition where I would have to explain to you that it would contribute to our growth in outer years in long time, okay? So it has to contribute to growth and to support not only the midterm targets, but also the trajectory to get there in the meantime. It has to support this. It has to support this.

So -- and thank you for the question because it's an additional clarification opportunity for me. It's -- don't expect me to come with a large acquisition, which would only tick the box in the midterm, okay? And I would tell you, "Okay, please wait, and it's going to come in 4 or 5 years, okay?" It has to support already the trajectory in between now and then. Now on DXC, we opened the file. Let me be a little bit more specific, but you will understand I cannot be too specific for obvious confidentiality reasons. But we opened the file on the basis of an assumption, which was linked with the change of management 18 months ago and what the current management of the company has achieved.

And I think they have achieved a lot in terms of client relationship, in terms of restructuring, in terms of balance sheet management. So it was on that basis. Then you know the end of the story, which was quite short. And I can't add more to that. But again, to your question, I repeat, it has to come in support to our midterm targets, to our growth agenda, but just not the endpoint of this, but also the trajectory between now and then.

I hope it's clear to your first question. Uwe, second question, please?

Uwe Stelter: Yes. I mean, indeed, so on the on your question around the price erosion, I mean, this is not a new phenomenon or anything which is accelerating. We are, of course, used to that, that there is in certain areas, we always will have price erosion, which we're offsetting indeed with organic cost improvement and product team improvement levers, plus, and it was my first point, really for the business mix because while our share of digital, decarbonization, cloud and security is increasing that comes also with a higher margin which in itself, of course, is a positive margin contribution. And then the offsetting factors are indeed increase in offshoring, continue to increase in offshoring by what I said, at least 3% in '21.

It is about the increase of cost savings in our real estate area, in data center rationalization, which we have focused very much over the last years, but also the improvement of lower-margin contracts to offset any price erosion.

Amit Harchandani: If I could just get a clarification, please, on question one. With the group almost at no debt position and you're committing to transformational M&A. Could you kindly remind us what's the level of leverage and/or equity dilution that you may be comfortable with for embarking on any transformational deal?

Elie Girard: Sure, sure. So on the leverage, our financial policy is

as follows: We don't want to go above 2.5x OMDA and to be very precise to you, Amit, when I talk about OMDA, I'm talking before IFRS 16 changes with the old OMDA orders of magnitude and leverage multiples orders of magnitude we have in mind.

So we don't want to go above 2.5x OMDA before IFRS 16 adjustments. And should we go above 1.5x, we would need a very clear and quick path to go back below 1.5x.

Operator: Our next question is from the line of Laurent Daure.

Laurent Daure: Three questions on my side. First, I'd like to come back on the strong bookings you achieved in recent quarters, and how this is going to be translated into better revenues? And especially for the U.S.

because you mentioned strong bookings, but the revenue there are still relatively soft. The second question is to clarify again on the M&A strategy. You've done a lot of small targets, but nothing medium-sized. So how is your pipeline looking right now? Is still a risk that you look at something big? Or are you still going to struggle and have to do 5, 10, 15 this a year to get to something significant in size? Or do you have maybe some things in between? And the final question is, if Pierre is on the line, on the unit delivered very strong growth again in Q4. If you could comment on the outlook for the next 2 years? And the main drivers in the hot areas in that space?

Elie Girard: Laurent, thank you for your 3 questions.

Uwe will take the first one; Pierre, obviously, the third one; I will come back on the M&A question. Uwe, please, on the...

Uwe Stelter: Laurent, yes, on the -- so indeed, the strong book-to-bill is translating into revenue. And that's what I also talked about on the backlog, which even for 2021, it gives us, of course, a very good visibility on the revenue growth, which we are targeting. More specifically, this will translate, and when we really look at all the deals we signed, into a growth for the company starting in Q2.

Q1, we still will have a bit of a base impact from 2020. But starting in Q2, we clearly see the growth based on the backlog. And that's also true for the U.S. So we expect for the U.S. already a slight improvement in Q1 and then for sure growth in Q2.

Pierre?

Pierre Barnabé: Of course, the cybersecurity market is very dynamic. With needs -- increasing needs for our customers to be protected versus increasing criminality in this domain. But of course, we need also to reinforce our portfolio in terms of services, geographical footprint and also technologies. This is what exactly we did with the recent acquisitions around Paladion, SEC Consult, Motiv and digital.security. As it is at stake is really to provide automated artificial intelligence-based detection and response solutions.

This is where we are. And it's where we believe that in the coming years, more than 2 years, we're going to provide to our customers, really state-of-the-art solution to protect them, then we see a strong demand -- continued strong demand in this domain.

Elie Girard: Thank you, Pierre. And on your second question, M&A strategy, Laurent. So we do have a very strong pipe on the, what we call, bolt-on acquisitions and self-finance acquisitions.

Like the 10 we've done in 2020, some of them just being commented by Pierre. We do have also a pipe of medium-sized acquisitions. And here also, thank you for the opportunity to clarify. We are not just looking at small bolt-on acquisitions and self-finance acquisitions and a very large acquisition. We also have some ideas on medium-sized acquisitions.

Yes. Thank you, Laurent.

Operator: Okay. We will take our next question, it's from Mohammed Moawalla from Goldman Sachs.

Mohammed Moawalla: Two from me.

Number one, I may have missed this in case you have commented, but just trying to kind of understand the shape of kind of the recovery in growth. And I wanted to clarify that on an organic basis, you're sort of implying 1.5% to 2%. So this clearly, the inorganic guidance also includes contribution from some unannounced M&A bolt-ons. So how should we think of that shape? And associated with that, it sounds like cyber demand is still pretty resilient, but we noted infrastructure weaken. So do you -- are you sort of banking on BNPS to drive the bulk of that reacceleration in 2021? And then secondly, just coming back on M&A.

I realize that you have exercised a lot of sort of financial discipline when you look at your M&A targets. But given the transformation you're talking about in moving up to sort of the value chain, would you sort of be willing and accommodating to be flexible just given where multiples are in the market and perhaps pursue more transformational opportunities in the areas of cyber and then obviously still sort of generate that value and drive that growth acceleration?

Elie Girard: Thank you, Mo. In fact, I think you had more like 3 questions. On your first question, your assumptions are absolutely right. So the guidance for revenue growth at constant currency includes an assumption of circa 2% of scope.

So you -- what you said, absolutely right. Uwe, do you want to comment on the mix of growth, please? And I will come back on the M&A question.

Uwe Stelter: Yes. I mean on the evolution more from what I said before, that we expect to start growing from Q2 onwards is, of course, the organic piece. So the organic piece will start to grow in Q2 and then gradually go up throughout the year and is augmented by the bolt-on acquisition and M&A activities.

So this will then increase, indeed, as well the overall numbers in, I would say, in the same way, meaning Q2 and Q1, Q2 and Q3 to increase the organic growth rate.

Elie Girard: And if I can add, Uwe, to the drivers, you're right to assume that all the application and digital business will get back to growth and support this shape and also the Big Data in cybersecurity, more with a mix effect because Big Data and cybersecurity, Pierre is taking a space in the weight in the group, which is obviously increasing year after year, with still the same very dynamic organic growth. Now on the on your third question on M&A. Yes, we are ready to acquire very qualitative assets, even of, let's say, a significant size. And including in cybersecurity, and I think we said that many times, we never said that cybersecurity would be only in bolt-ons.

Then, as you mentioned, we have a financial discipline. We -- should we acquire an asset with the higher multiples, it would have to be perfectly justified on the quality of the asset, on the commercial synergies that we could implement, et cetera, et cetera. But again, don't expect us to buy assets with a totally crazy multiples. But if I may, maybe not in your mind more probably because you know that very well, but just in case, correct an idea that we hear very often, when we look at cybersecurity assets, you've got a series of assets with extremely high multiples, which are assets which are fully software editors. And this is not primarily what we're looking for.

We are looking for a combination assets with -- which are either managed security services, where we are already in the top 3 worldwide. And I think we have the capacity to increase this positioning. In fact, we're number 3 today, number 1 in Europe. Or assets with a combination of services and some software bricks, but not pure Software-as-a-Service, cybersecurity editors. So we're talking about multiples, which are surely higher than ours, but not necessarily in the area of the ones you may think about.

Thank you, Mo.

Operator: Our next question is from Nicolas David from ODDO BHF.

Nicolas David: I have 2 questions also on my side. First is regarding IDM. Again, sorry for that.

Did you see a change in the competitive landscape maybe this year or more recently in 2020? Due to authorization and remote work, did you see an acceleration to offshore? Because we saw some pure Indian players winning large IM deals with Daimler or Airbus just to name the 2? Does it imply yes that offshore delivery can become widespread even in Europe in this segment and even for sector, which maybe are lagging there? And on your side, are you ready to increase your offshore delivery? And what do you see as an impact for your margin for IDM? And the second question is regarding the U.S., you are still declining 7% in Q4. Could you give us a sense on whether it's IDM or BNPS, which is weighing on growth? And what could be the timing of the growth recovery in the country?

Elie Girard: Nicolas, and thank you for your 2 questions. Uwe will take the second one on the U.S. and I will ask Adrian Gregory to take the one on the offshore that we are, yes, willing to increase obviously. Uwe, on the second question in the U.S.?

Uwe Stelter: The U.S., I would say, from a business mix perspective, the main recovery we expect, as I said, already slightly in Q1 and then for sure in Q2 is mainly on the more project or application part of the business, which, of course, had also the impact in 2020.

So we expect that one to grow much more. The infrastructure business today is already trending towards more flattish in the last quarter. So it's really the business and platform solution type of business.

Elie Girard: Thank you, Uwe. Adrian, please, on offshoring?

Adrian Gregory: Yes.

Thanks, Elie. So one of the things we've done through the Syntel acquisition is to merge the global delivery centers. So that gives us an excellent offshore platform now to really accelerate. So what we're seeing actually is more combination deals as well that now open to us. So we've seen that with a very large health care company in the U.S.

and hospitals group. We've got a combination of infrastructure and applications. And then we've seen that with the likes of Nest in the U.K., which is a combined again, infrastructure applications, cloud and operations deal as well. So we've now got the platform to really accelerate in offshore and bring these skills to bear in these combination deals. So yes, that's a good lever for us.

Back to you, Elie.

Elie Girard: Thank you, Adrian, and thank you, Nicolas, for your questions. We can take the next question, please?

Operator: Our next question is from the line of Sven Merkt from Barclays.

Sven Merkt: I would first like to ask a question on the 2020 margin. It was actually at the lower end of your guidance, even though your revenue was -- revenue growth was at the midpoint.

Could you maybe comment on what drove this divergent? And if there were any increased investments or other effects we need to take into account? And then secondly, for 2021, on an organic basis, you don't expect a full recovery to the 2019 level. Is there any upside to the guidance just from an increase or normalization of activity? Or you expect this to be only come back later, maybe in 2022?

Elie Girard: Thank you, Sven. On 2020, Uwe is going to answer. On 2021, I think the trajectory we see today is the guidance you saw for 2021 and back to level pre COVID in 2022. Uwe, on margin 2020?

Uwe Stelter: Yes.

Thanks for the question, Sven. When you look -- again, when we guided on the 9% to 9.5% that was back in April without knowing what the crisis would bring. And as you know, with a second and the third lockdown, we were still able to be in the range of 9% to 9.5%. So therefore, the cost programs and everything actually delivered what they're supposed to deliver. And we're compensating for any delayed release of the lockdowns and so on as we know.

Elie Girard: Thank you, Sven.

Operator: Our next question is from the line of Michael Briest from UBS.

Michael Briest: A couple from me as well. Just, again, going back on the M&A theme. I think a lot of investors would struggle to see how buying almost anything in infrastructure and data management would help you with your midterm growth agenda.

And given the weight of DXC's activities there, can you maybe sort of explain what you saw that, I guess, consensus is modeling for revenue decline at DXC for a couple of years? And DXC's management, when they announced the end of talk sort of suggested that the offer was inadequate. Can you say whether you walked away or whether price was the sort of deciding factor? And then just going on to the exceptionals, I think in cash flow, it was €191 million last year, Uwe, and you're guiding for €40 million more. From a sort of P&L perspective, is it going to go up as well? Is it going to be above 2% of revenues?

Elie Girard: Michael, thanks for your questions. So Uwe will answer the second question now. I will come back on the M&A afterwards.

Uwe Stelter: Yes. On the, let's say, reorganization, rationalization and integration costs, indeed, we expect, from a cash flow perspective that this would be around 2% in 2021 and will then also go down in '22. But of course, a bit of a lag effect when the, so to say, the actions unwind in terms of cash. As I said, on the net income basis, I expect the -- this bucket of cost to go below 1% already in '22. Cash flow will follow very quickly afterwards.

But in '21, this is the €40 million I had in the cash bridge of additional cash out, which we put into our guidance of the €550 million to €600 million.

Elie Girard: Thanks, Uwe. On M&A, you had in fact 2 subquestions, Michael. On the infrastructure, first of all, DXC is roughly half-half infrastructure and application digital. On the infrastructure itself, we do not intend to acquire fully loaded infrastructure assets.

I think we said that several times. In the case of the x that you are pointing at, where you have roughly half-half. The point is to assets, whether the move to the cloud is a positive driver to the growth situation by situation or not. We have in Atos, many situations where many customers where the move to the cloud is very beneficial because it allows us to embed our global and comprehensive Atos OneCloud offer, which includes, yes, infrastructure, but also the application modernization, pure cyber protection of the full tech and more and more services solutions, meaning including our in memory service BullSequana and Edge Solution. So it's a way to grab, if you like, to attach a lot more from our portfolio.

So -- and we've got many, many examples of this. So there is a way to make this grow. But this is the whole point of assessments we make, again, situation by situation. And on your second subquestion, the only thing I can say is that we moved away and we did not deliver any further offer after our initial approach. We did not.

Thank you, Michael. Next question, please.

Operator: Our next question is from the line of Neil Steer from Redburn.

Neil Steer: I just have a couple of quick ones, if I may? With regard to the free cash flow conversion, if you take the center point of your guidance for the current year '21, it appears to be free cash flow of your adjusted operating margin of sort of 50%, 51%. And if we look back since sort of 2013, 2014, it's actually been consistently at that kind of a level.

I'm just wondering, as we move from '21 into '22, is it realistic? And what levers are there to expect that to actually get up towards the 60% target that you have? That's the first question.

Elie Girard: Okay. Maybe you can ask all your questions? You said you have several questions? Yes.

Neil Steer: Okay. Sorry, sorry.

And the second question is you mentioned a couple of times during the presentation that if you look at the backlog of, if you like, secure deliverable revenue in 2021, the backlog is actually up 8% year-over-year. And I'm just trying to square the discrepancy between that and the revenue growth objective you have at constant currencies for this year?

Elie Girard: Okay. Uwe?

Uwe Stelter: So the -- your first question, Neil, on the cash conversion. So first of all, I mean, it's hard to go back into many years ago, but for sure, that included also Worldline, which, of course, had a, let's say, higher cash conversion by principle. But I think more important about the future -- your question about the future.

The main impact, we still see in '21, as I was just explaining to Michael's question as well, we still have the execution of our programs in Continental Europe around the reorganization and rationalization and also the Syntel, the last leg, if you want, or the last year of the Syntel integration implementation costs, which are in 2021. So the biggest lever and the biggest impact to 2022 will be the reduction of those spends, which is both Syntel, if you remember, €30 million and then also going down in the reorganization cost. So this will be a large lever to improve also the cash conversion, besides, of course, the normal working capital actions.

Neil Steer: And the second question with regards to the backlog that's deliverable in the current year and the growth of 8% versus the similar point last year?

Uwe Stelter: Yes. Obviously, when you look at the 8% increase, then, of course, last year, we were in a decline scenario, now we are getting into a growth into a growth project so it gives us, of course, the headwind to back up the growth, which we set for 2021.

So this is...

Elie Girard: I think you meant tailwind.

Uwe Stelter: Yes.

Elie Girard: You said headwind.

Uwe Stelter: Sorry.

So the gives us the backup at the tailwind of the growth, which indeed we coming from a minus 3% and now going into a growth scenario. So that's what, of course, gives us the support.

Elie Girard: And maybe if I can complement, Neil. You've got the -- the delta you have between the guidance on the growth and the backlog also comes with always a margin and a buffer of security, if you like, for the in-the-year revenue. But I mean, you're right, it does comfort our revenue guidance.

Okay. Thank you, Neil. Thank you very much. Next question, please.

Operator: Next question is from the line of Toby Ogg from Bank of America.

Toby Ogg: I've got a couple, please, actually. So firstly, just on the growth guidance then for 2021. Perhaps you could just talk a little bit about the puts and takes that are baked into that range? What would need to happen operationally and from a macro perspective to hit the low end? And equally, what would need to happen to hit the high end of that range? And then secondly, I just wanted to come back on the infrastructure segment, which seemed to have worse a little bit relative to Q3. Perhaps you could just give a little bit more detail on why that's happened? And any color around the developments in that segment on the infrastructure side specifically would be great?

Elie Girard: Thanks for your questions. Honestly, on the first question, we're talking about a range of 0.5%.

In this environment, sorry, but between the bottom and the top of the range, there are not too drastically different scenarios. I guess you will understand this. On the second question -- I'm sorry, but I'm hurrying up a little bit given the time. On the second question, there is nothing to see in the difference between Q3 and Q4 in IDM, where it's basically a few base effect of onetime sales last year.

Uwe Stelter: Correct.

Elie Girard: Thank you. Thank you very much, Toby. I think we've got 1 -- okay. One last question, please.

Operator: Okay.

The next one is from Stacy Pollard from JPMorgan.

Stacy Pollard: A few quick ones for me then. Decarbonization product set. I know it's still really early stage, but can you give us a sense of what revenues it might -- sorry, what revenue contribution might be in 2021? Just broad range just to see where you're going. Second question, you've mentioned before that some of the work from home and other work -- new work patterns seen in FY '20 are likely causing some longer-term structural changes as well.

So is there any permanent margin benefit you think you can get out of that? I mean, maybe it's not something in your midterm targets yet, but is that a possibility? And third quick one, subcontractors. You mentioned a factor you mentioned this in a factor of your margin progress. Where are you today versus historic use? And as your revenue growth accelerates, might you need to also ramp that up?

Elie Girard: Thanks for your questions. Very quickly on decarbonization, we should be in the range of €100 million run rate. We are today in the range of €100 million of annual run rate in pure decarbonization offerings.

This excludes our decarbonization level agreements that we are including in many contracts, and which has allowed us already to win in competitive bids some more traditional contracts. And the ambition on the first figure, which is the €100 million run rate we have today in pure decarbonization offers is to get to €500 million midterm. On your second question, digital workplace, yes, there is some operating leverage there with the size, but also with the automation that we are implementing on all the setups and -- which should be a driver indeed, of increasing margins. And on subcost, we are in the range -- the historical range. And as we said in our introduction with Uwe, we've seen, in the end of the year, start of ramp-up, just like in own staff to fulfill the demand also in subcontractors.

All right. Thank you. Thank you very much, Stacy. I think there is no more questions. Thank you very much for your attention and your time, and talk to you very soon.

Bye-bye.