Executives: Thierry Breton - Chairman & CEO Patrick Adiba - EVP & Chief Commercial Officer Elie Girard - Group CFO Michel-Alain Proch - Senior EVP & CEO, North America Operations Charles Dehelly - Senor EVP & CEO Global

Operations
Analysts: Mohammed Moawalla - Goldman Sachs Brice Prunas - Exane BNP Paribas Michael Briest - UBS Gerardus Vos - Barclays Capital Laurent Daure - Kepler Chevreux John King - Bank of America Merrill Lynch Alex Tout - Deutsche Bank Georgios Kertsos - Berenberg Stephanie McCauley - Credit

Suisse
Operator: Welcome to the Atos First Half 2016 Revenue Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Thierry Breton, Chairman and CEO. Please go ahead, sir.

Thierry Breton: Thank you and good morning, ladies and gentlemen. Thierry Breton speaking. Thank you for attending Atos' conference call today for the first-half 2016 revenue. I will start with the key figures of 2016 and remind you of the 2016 guidance. Then Patrick Adiba, our Commercial - in charge of our global sales, will comment on Group commercial dynamism and several large signatures in Q1.

Elie, our Group CFO, will develop the 2016 operational and financial performance over the first quarter. Finally, I will conclude before starting the Q&A session together with my colleagues here in Bezons, Charles Dehelly, our CEO; Michel-Alain Proch, our SEVP mainly in charge of the [indiscernible] who come especially this morning to be with us; and Girard Elie [ph]. So let's move on the next slide. You can see the key figures of Q1. My main assessment is that we performed the best Q1 since I joined the Company both in revenue and bookings, even if I think we can continue to do better next year with what is in our hands and what we have built since I joined the Company.

Revenue reached €2.757 billion, increasing by plus 15% at constant exchange rates. Organically we reached 1.6% growth, again a strong improvement compared to the last few years which materialized our strategy to accelerate the growth of all our service lines by leveraging our managed services backbone. The Group order entry in Q1 reached a record €2.8 million. This represented a 27% increase and a book to bill of 101%, 10 points more than last year. As you can see, the positive trend started in the last years continues.

The commercial activity was well-balanced by service line, particularly strong in consulting and system integration and big data and cyber security, with book to bill ratio at 110% and 117% respectively and solid managed services at almost 100%. Last month, we welcome 5,000 colleagues from Unify, leading to a total number of employees of 96,000 at end of March. And as you know, we're preparing to welcome our colleagues from Equens very soon. On the next slide you can see what are the main highlights of the first quarter of the year and therefore of the publication of today. First, indeed, the revenue of the quarter showed a positive organic growth for each service line with a strong commercial dynamic.

We have improved our business model and we're now generating profitable growth in each business line. Second, in managed services, where we have a little bit more than half of the business in infrastructure management and the rest in data management, the activity was driven by hybrid cloud transformation where the growth year on year was above 30%, well in line with the €700 million plus that we expect for the full year in line with our three-year plan. This performance shows the relevance of our strategy in this service line where we manage infrastructure and huge volumes of data for clients using cutting-edge technologies and therefore generating growth for the total Company. Third, among the services lines it is noticeable that consulting and system integration returned to growth with a strong improvement in Germany. We have been able to fix the situation thanks to a strong other and with innovative offerings and with a big workforce management, where we considerably increased the personnel efficiency.

This makes us confident to reach positive organic growth along the year as planned. And fourth, at the same time, we have been able to accelerate revenue growth in big data and cyber security at plus 12% and also in Worldline at almost 7%. I continue with the highlights of the quarter on the next slide 8. We closed the Unify transaction at the end of January and the integration is now well on track. The project team is using the same processes than the one having led the integration of Bull and generated the cost synergies under the leadership of Charles Dehelly.

Having worked also on the other's integration, they know very well the German environment which is key. Nine, regarding Worldline, we're in a position to confirm the expected closing of Equens transaction at the end of Q2 as planned. Significant milestones have been reached, including a global terms of the transaction granted by the European antitrust authorities yesterday. And 10, finally, we continue our program to reinforce our Digital Edge strategy by increasing innovation and added value mainly on four fields of activity, infrastructure, applications, analytics and security. In that context, Atos launched a new offering named Atos Codex.

Patrick Adiba will explain it later in his presentation, but in a nutshell, this solution provides end-to-end data analytics along the complete IT value chain. This solution offers organizations fast and cost-efficient means to explore the value of their existing data. Atos Codex powers a smart use of data analytics that is a competitive differentiator to help organizations stay one step ahead and become disruptors rather than being disrupted. We also launched the faster supercomputer line in the world named Sequana. This exascale line of high performance computer offers a 1,000 times more performance than current petaflop scale at this time and is 10 times more energy-efficient and 10 times denser.

This supercomputer brings the necessary computer performance to increase the quality and speed of digital simulation to accompany the digital transformation of our clients both in the private and governmental sector. Now let's move to our 2016 targets. As you can imagine, we confirm today our 2016 objectives. As a reminder, the guidance includes Unify's contribution for the services part and excludes Equens. First in terms of revenue the Group targets to continue improving organic growth.

Second, the Group has the objective to increase its operating margin rates to reach between 9% and 9.5% of revenue. Finally, we expect free cash flow generation of circa €550 million, excluding the proceeds from equity-based compensation which should represent circa €50 million in 2016. Patrick, now the floor is yours for the commercial activity.

Patrick Adiba: Thank you, Thierry. Good morning, ladies and gentlemen.

I'm Patrick Adiba, Chief Commercial Officer of Atos. As always, I will start my presentation with the key commercial figures. The total Group order entries reached €2.794 million in Q1 2016, representing a book to bill ratio of 101% compared to 91% in Q1 2015. This is the highest order entry ever for a first quarter. The backlog at €18.9 billion represents 1.7 years of revenue and the qualified pipeline at €6.4 billion illustrates the sales dynamic that we continue for the rest of the year.

Those elements make me very confident in the continuation of the successful sales dynamic initiated in 2015. We can measure it in the Q1 results and it will continue and accelerate in the following quarters, especially in Q2. On the next slide, it's also a reminder during the analyst day last June 18 we presented the four customer transformation challenges on their digital journey. Our go-to market is now organized to answer these challenges and I will present the main wins of the quarter in the next slides according to this vision. Just as a reminder, we're talking to increase the use of data analytics and bid data in order to help our customers to reinvent their customer experience.

We bring solution tools for productivity, quality and costs in order to drive operational excellence. The challenge of enabling the business reinventions aims at increasing digital revenue by changing the value chain or creating new business models. Finally, we address the trust and security that is absolutely fundamental to protect data and assets. Altogether the four quadrants represent the full cycle of digital transformation. On the next slide you can see the main signature related to digital transformation projects.

Those contracts are well distributed across markets and geographies. And I would just like to focus on a few of them. Elopak, this is a four-year contract to provide application operation services for the SAP HANA platform to Elopak. In this contract we will change the software landscape of the customer and will establish consumption-based services and solutions to support the configuration and the environment on an ongoing basis that is totally scalable. For this contract is very illustrative of our expertise in end-to-end implementation of SAP HANA.

The next one, Uni Rijeka, will foster research and innovation. It's the biggest supercomputer in the Adriatic region and it will make HPC supercomputer, so high-performance computer capacities, available to local companies as a service. For this solution we have a system that has a peak performance of 239 teraflops. The contract we signed with an agrochemical leader in North America, it's a full cloud transformation solution with hybrid cloud, very close to Siemens with a private cloud service orchestration and Amazon and MS Azure as public cloud targets. Of course, we're responsible for the end-to-end transformation.

And finally, the fourth one, the European Investment Bank, we have signed a contract of a total value well above €100 million for [indiscernible] year contract in which Atos will ensure the outsourcing and transformation of the IT infrastructure services. As a result of this deal, we will provide end user data center, data network, security services embedded in overall service integration support. This will enable the EIB to focus on growth and value added functions as well as ensuring the existing high level of customer satisfaction and security. I remind you that the EIB is a European Union bank and the only bank owned by and representing the interests of the European Union member states. The EIB works closely with other European institutions to implement EU policy.

Moving to the next slide, I would like to focus on something that Thierry mentioned, on Atos Codex. At the time of our full-year results presentation, we presented you our vision on the end-to-end integration approach, leveraging the skills and expertise of our service line and especially with our leading position in managed services in order to propose our clients comprehensive answers to their IT needs in the context of digital transformation. Our Group sales dynamic is fueled by the relevance of this positioning and by our innovative approach. This is in this context that we recently launched Atos Codex that enables our clients to leverage the full value of their data thanks to end-to-end solutions supported by the unique platform. According to [indiscernible] 88% of enterprise data is still unexploited and 66% of organizations don't know how to truly get value from their big data.

Consequently, it creates a huge demand for solutions allowing better monetization of business customers and internal data. Here I would like to quote one of our largest customers, one of the most advanced in industry data analytics, I'm talking here about Siemens, Joe Kaeser said that those who control data and the value chain, if you look at a high-performance energy turbine, there are thousands of sensors in that machine and every sensor has a story to tell. At this stage, we have signed above 40 pilots and proof of concepts that we will soon transform into high-value projects. On the next slide, more precisely, the reason why Atos is different in this domain is because we have all the elements of the end-to-end value chain as shown in this slide. The combination of our well-known expertise in infrastructure management and cloud orchestrations with cognitive solutions, analytics driving business outcome, data scientists with deep vertical expertise and unique capabilities in extreme computing are giving us very strong differentiation recognized by customers, by the industry analysts and by the technical advisors.

In the following slide you will see a few concrete examples to illustrate the value creation. On this slide you can see a few examples, such as industry 4.0 in manufacturing, improving social and welfare services in public and health, enable better customized services while minimizing risk in financial services or real-time customized offering in retail. I'm now giving the floor to Elie for commenting the financial results.

Elie Girard: Thank you, Patrick. Good morning, everyone.

Elie speaking. I'm going indeed to cover the operational and financial performance for the first quarter. First, let's start with the usual reconciliation between statutory and organic figures for revenue. Statutory evolution, meaning Q1 2016 revenue compared to the one published in Q1 2015, was plus 13.6%. Exchange effect accounted for a total of minus €36 million, mainly coming from the British pound which depreciated by 3% year on year, the Brazilian real minus 26% and the Argentine peso minus 39%, partly compensated by the U.S.

dollar plus 3%. Adjusted from this effect the revenue evolution at constant exchange rates was plus 15.0%. Scope effect on Q1 2015 statutory revenue amounted to plus €318 million related to three elements, Xerox ITO three months for €295 million, Unify two months for €68 million and minus €45 million following the transfer of the DWP WCA contract two months, the disposal of onsite services in France two months, the sale of the occupational health business end of December 2015 three months and the external revenue which was made with Unify and which is now accounted as internal revenue further to the acquisition, that's another two months. This leads to an organic growth at plus 1.6% which reflects the performance of the Company in the first quarter. The next slide presents the performance by service line.

As Thierry explained, all the service lines grew in Q1, representing 56% of the Group in the first quarter of 2016. Managed services revenue was €1.555 billion, plus 0.4% organically in line with the trend observed last year. As a reminder, 2015 organic growth was also plus 0.4%. The service line continued to successfully drive the transition of its customers to cloud infrastructure resulting in a positive organic growth thanks to volumes increase and market share gains globally compensating unit price decrease. Growth materialized primarily in North America, benefitting from the full integration of Xerox ITO and fueled by increased volumes with several large customers within public and health and telecom, media and utility sectors.

Germany went back to positive, mainly benefitting from increased volumes in the manufacturing sector, including with Siemens. Asia Pacific achieved a solid growth particularly due to higher volumes in financial services, while IMEA increased thanks to new customers in the telecom sector. In the UK, there was a base effect as Q1 last year benefitted from outstanding volumes with NS&I. Finally, the situation remained more challenging for Benelux and the Nordics notably due to the end of some contracts in the previous quarters within financial services and the public sector. Representing 28% of the Group, consulting and system integration revenue was €778 million, back to positive growth with plus 0.4%.

This return to organic growth came from particular improvements recorded in Germany but also in France mostly fueled by the public sector with ministries as well as local administration. North America faced a comparison effect related to the delivery of several contracts in the manufacturing sector last year. In the UK the continued strong consulting activity partly compensated ending contracts in system integration mainly in the public and manufacturing sectors. Finally, Benelux and the Nordics was almost stable. Revenue in big data and cybersecurity was €137 million in 2015 representing 5% of the Group, up plus 12.2% organically.

This strong performance was mainly coming from Germany fueled by strong sales in HPC and software activities, in France from a continued strong demand within the public sector for both big data and cybersecurity solutions and in the UK with new sales in the cybersecurity area. Worldline contributive revenue was €287 million improving by plus 6.7% organically. On a standalone basis, revenue reached €299 million in the first quarter of 2016, up plus 6.5% at constant scope and exchange rate. The three global business lines contributed to the revenue organic growth over the period. In merchant services revenue continued to accelerate mainly with commercial acquiring with a strong volume increase on the international chart.

Payment terminals grew at a double-digit rate thanks particularly to the fast international distribution expansion through existing and new business partners. In online services strong volume growth was also reported. In financial processing revenue growth was led by high volumes recorded in issuing and acquiring processing as well as in e-SEPA platforms. High levels of activity has been also recorded in authentication and in payment of software licenses both in Europe and in Asia. Mobility and e-transactional services was growing by successfully more than offsetting the termination of the VOSA contract in the UK thanks to strong sales in France and in Germany in businesses such as e-consumer and mobility or e-government collection.

The next slide presents the revenue evolution by business unit. Several large geographies such as Germany, North America and France significantly improved their revenue performance during the first quarter of the year. Germany turned back to positive in all service lines with a strong organic growth of plus 7.4% thanks to strong actions leading to a successful commercial activity materializing in revenue but also combined with a one-off sale achieved in big data and cybersecurity. North America posted a strong plus 3.7%, benefitting from the successful integration of Xerox ITO and the new sales dynamic mainly in managed services and despite a lower activity in system integration in manufacturing and retail. France recorded plus 3.4% revenue organic growth thanks to the positive turnaround in consulting and system integration as well as a continued healthy performance of big data and cybersecurity.

Revenue trend improved in managed services thanks to the new contracts signed during the last few months. Worldline, as I already mentioned, contributed to the Group organic growth with plus 6.7% over the period. In other business units, Asia Pacific and South America recorded double-digit growth. AIPAC had an increasing activity in managed services and more particularly in financial services and South America developed its system integration business through new projects in manufacturing with clients such as Siemens and Volkswagen and also in big data and cybersecurity. The business in Iberia and Central and Eastern Europe remained stable.

The UK faced, as I already mentioned, a base effect due especially to the outstanding volumes with NS&I performed last year and to a lesser extent fewer projects in consulting and system integration. Without the Q1 2015 base effect, the UK would have shown growth in Q1 and I expect the UK to get closer to stability in Q2 and to grow again in H2. Benelux and the Nordics was at minus 4.4% which is the trend observed last year. This resulted from the ramp-down of the termination of contracts in the previous quarters with some customers in managed services and a slower than expected ramp-up of the Philips contract which is now well in place. The good news was a particularly strong commercial activity in Q1 with a book to bill at 131% which supports and makes us confident for a return to growth during the year in these geographies.

On the next slide you can see the headcount evolution. Total headcount was 96,298 at the end of March 2016 compared to 91,322 at the end of December 2015. The increase of plus 5.4% of the Group workforce was mainly due to the circa 5200 staff from Unify who joined the Group on February 1, 2016 of which circa 3300 staff are from the Unify software and platforms operations. Excluding the discontinued Unify S&P operations, total headcount was 93,137. On this perimeter attrition in Q1 was 11.4% at Group level of which 16.8% in offshore countries.

The number of direct employees at the end of March 2016 was 68,859, representing 93.3% of the Group headcount, excluding software and platforms, broadly stable compared to the end of 2015. Indirect staff was 6279, increased by 515 employees compared to the end of December, mostly due to the integration of Unify managed services. My last slide presents an update on Unify. The acquisition has been closed end of January and from that date the services business in core countries, Germany, U.S., UK and Austria, has been integrated within managed services with an external revenue of circa €70 million for February and March. The other activities, representing circa €130 million in February and March, are gathered with Unify S&P, software and platforms, led by Jon Pritchard, formally in charge with the indirect sales channel.

Jon has also been appointed as a member of the Executive Committee of the Group. During the first quarter, 37% of the staff restructuring plan of the full year was already achieved, on track with our expectations. Action for reduction of non-personnel cost, in particular in real estate procurement and IT, are delivering in line with the full-year objective of €50 million cost reduction. I would like also to present some key operational indicators on Unify software and platforms. We measure the expansion of the indirect sales channels by the number of partners.

This number grew by plus 10% in Q1. We also track the number of users of cloud-based communication with a target to make it grow by 20% per year. Finally, we follow very carefully the deployment of the Unify software and platforms circuit collaborative tool with a target to reach 500,000 users by year end. The achievement of our targets associated with the restructuring impact supports our objectives to reach circa €100 million EIBTDA in 2017 for Unify software and platforms as announced in November last year. We will be of course available for your questions on Unify with Charles and Patrick in a moment.

Now it is back to you, Thierry.

Thierry Breton: Thank you, Elie. And before leaving the floor to the questions, just to wrap up let me tell you once more that this year started very well. The level of bookings and book to bill was very good for a first quarter. And Patrick told you in his own language that Q2 is expected to be higher or very high in revenue.

Remember that we target an improvement compared last year organic growth. And I should say that the first quarter is more than well in line with this target. So I'm very confident in our Group as digital is moving every business through the disruptive forces of mobile, big data, cloud, security and social media. These technologies are rapidly and also radically transforming the way we all communicate, connect and consume. They are also significant enablers of competitive advantage and growth as almost everything can already be joined up at a technological level.

In that context we're preparing our next 2020 plan which will be presented on November 8 this year here in our headquarters in Bezons. We will then discuss strategy, technology, market trends and obviously financial figures and as you can imagine, with continued improvement in growth, cash and profit. We're now ready to take your questions. Thank you.

Operator: [Operator Instructions].

We will take our first question from Mohammed Moawalla of Goldman Sachs. Please go ahead. Your line is open.

Mohammed Moawalla: Thierry, I'm wondering if you can shed some more light, given the stronger than - start to the year, I know you had stated the ambition to double - at least double last year's organic growth. How does the first quarter change that perspective against - related to the commentary you gave around the year? Second quarter also seems to fairly positive.

So is it a bit too early in the year to reassess guidance or do you feel that there is scope for a further acceleration as we move through the quarters? And my second question was if you can just remind us again are there any other contracts that we should be aware of that could be running off, as we look at the rest of the year, as we think about this guidance? Thank you.

Thierry Breton: So I don't know if this time you are in California or back in London. Hopefully for you, you are in London. So to be honest with you, I was expecting this question from one of you. So you were it and as you could imagine, I will tell you that even if I'm, as I said, together with my Board, because we as the Board of Directors we said that we're very pleased with the figures.

It's too early and it's not the time for us to review the guidance. We will do this in due time and our next rendezvous will be in July and then we will see what we will have to say. But today it's too early to review the guidance, as you mentioned, two months after having issued it. But this being said and I was vocal also in the media, I should say that we're confident for the business in Europe, in France and in Europe. And it's the first time since I'm the Chairman of the Company that I'm telling this as strongly as I say there is a lot of appetite for everything we have.

I should say also that in Europe having everything in hand is extremely important, but also Michel-Alain in the U.S. our digital and strategy is really making a breakthrough. So I think that, again, step by step we were carefully building this Company which is of course a services company, a digital transformations company. But the fact that we control and understand all key pieces of technologies is making really I believe now the difference. So overall, yes Mo, we're confident for the year.

Now if I only double the growth versus last year, I will be happy because we will have fulfilled our commitment, but personally, I will be unhappy and my team knows this extremely well. And to be very honest with you, I'm pleased with the 1.6% organic growth but I was pushing the team to do more and I could tell you that next quarter, I'm sure that we will do better than this one. So this being said, the second question, Elie, if you want to?

Elie Girard: We do not expect contracts run-off in the rest of the year.

Operator: We will take our next question from Brice Prunas of Exane BNP Paribas. Please go ahead.

Your line is open.

Brice Prunas: My first question is on managed services. So there has been some concern lately about the trend of that industry and finally we see you keep resisting and some of your peers also are doing a bit better. So could you elaborate on the driver for this relative outperformance of this business? And also if you could qualify the recent alliance you have made with some technology vendor, then how does that position yourself versus the competition? Can that also explain why you resist well? And my second question is more on CS&I [ph], so finally you have turned the CS&I business in the black this quarter. This was expected but it's reassuring.

So I would like to see some evidence that this trend can be sustainable beyond, obviously, the book to bill that is already pretty good. Thank you.

Thierry Breton: For the second questions I will come back later, but we're confident. Here again, Charles, we really have changed the management. We have now a very strong team.

We hire, by the way, also new people which were missing in the organization and we will comment in a few minutes, but for the first one, Brice, you know that it's not a surprise to us. Even, I don't want to feel arrogant, because we're managing at - this is a difficult business to manage. But we always told you that we were confident to grow this business and, by the way, not only us and you have seen, you mentioned, indirectly one of our biggest competitors two days ago, very positive, an even better performance than us, so it means, Charles, that we have room for improvement, with only the 0.4%, when we see that some of our competitors are making this business plus 2%, it means that we perform well, Brice, but we can do more and we can do better. We can do better, because, again, we're managing infrastructure and data for our customers and, believe me, this is something which is becoming extremely critical. You know that I'm discussing this with all our customers, but also with all the regulators, including in the EU and in the EU I could tell you that I will be next week, next Monday, in Hanover, for this big fair and I will speak here and the fact that we're the leading European Company managing data and infrastructure for our customers is absolutely critical.

So I could tell you that we're winning market shares. We're winning market share, Brice, in this, thanks to our digital edge offering, Michel-Alain and Michel-Alain will say a few words on this, because not only we're doing this in Europe but also in the U.S. Michel-Alain?
Michel-

Alain Proch: So, yes indeed, as Thierry said, we have positioned our strategy around digital edge which is a full digital journey for our clients, both at the level of the infrastructure, the application, security and data analytics and risk. To answer your question about our strong partnership with key technology vendor, these partnerships are at the very heart of this strategy. The first one you know is obviously the EMC Federation, EMC and VMware, in which we're one of their largest partners, maybe their largest partner.

The second one which is extremely important in our solution is ServiceNow, because we have made, 18 months ago, the choice to renew entirely our infrastructure tooling with ServiceNow, so this is providing the full automated and orchestrated solution infrastructure which is really making the difference. Still in the infrastructure part and in cognitive computing, IPsoft, IPsoft, with which we're automating our infrastructure layer and we're developing a virtual agent for our help desk on the basis of Amelia. We have announced a third partnership which is an exclusive one. The press release is going to go out in the weeks to come, but we have already announced it at our Boston industry analyst conference, a very strong partnership with Kick Facts [ph] which is a company providing data analytics journey for both IT and for the business of our partners. And finally and Thierry was very clear in this press release, a very strong partnership with Siemens which gave birth to Atos Codex which is the top of our strategy in terms of data analytics and, let's say which encompass all our strategy in the big data part.

Thierry Breton: I would like to add also something here and also now we have decided to have an aligned strategy both internally and publicly, insider security and protection of data. Elie, for the C&SI?

Elie Girard: So, on your second question, on C&SI, [indiscernible] and systems integration, so, we've got a list of indicators we're looking at and that indeed make us confident beyond this first quarter which is only a start of the turnaround of C&SI. As you mentioned quickly order book to bill was strong in Q1 in C&SI, 110%, but it was also strong in Q4, at 133% in C&SI, so the commercial dynamic, Patrick, is really there and accelerating. And then we have our two C&SI engines, in Group which are in Germany and France which are showing the biggest turnaround. In Germany, SI grew more than 3% in Q1, more than 6% in France, so we've got our two SI engines which are really attracting the global service line.

We also feel that on specific offers, we also feel a strong traction, for example, with SAP HANA, end-to-end SAP HANA which is an accelerating offer today, in many geographies, especially in Europe. We see, also an increase for the utilization rate, the global utilization rate and maybe more importantly, the individual utilization rate, in particular in Germany, in the whole SI technology services and consulting practices. So that, all of this, is really the base of our confidence for a continuous improvement and acceleration over the year, of C&SI.

Thierry Breton: Just another key element, I think we have, starting last year, we have started to attract very talented people in SI which, it's a people business and Atos now continued to attract. In first half of this year we attract very talented Indian manager, to complete our organization and which make confidence about the resilience of our improvement in C&SI.

Operator: We will take our next question from Michael Briest of UBS. Please go ahead. Your line is open.

Michael Briest: In terms of the headcount trends, I mean, obviously with the Unify acquisition in there, there is some growth, but excluding that it's basically flat. I guess if you're anticipating growth continuing and talking about a better 2017, I would think that you'd be looking to add net headcount.

Can you talk a bit about your hiring plans for the year? And then, secondly, in terms of the Unify assets which are up for sale, there is some consolidation going on in that sector at the moment, do you think you need to get that business to a run rate profitability of €100 million or approaching that, before considering sale or would some, would a transaction earlier this year be possible? Thanks.

Elie Girard: So on your on Unify S&P software and platforms which is indeed the discontinued part, discontinued operations part of Unify, we clearly and as we said when we announced it, we want to push with the restructuring to make sure that we have a healthy asset to sell and we're on that way. And this is what we showed in the presentation, in the figures, because in fact, in just one quarter, we achieved 37% of the restructuring of the year and we're well on track to get to €100 million EBITDA in 2017, as planned. Moreover, you mentioned the M&A activity around that and we're, of course, closely following this. The Polycom-Mittal transaction that was announced is perfectly in line with what we said in November, because you noticed 9.6 times EBITDA 2015 for this transaction which is roughly the figures we looked at and we talked about when showing comparables early November.

So we're well on track for that. Can you elaborate on your first question, if you don't mind, Michael? I didn't get exactly the headcount question you mentioned.

Michael Briest: I guess if you're anticipating an accelerating business, you would be adding headcount and at the moment it's still shrinking. I appreciate there are some back office efficiencies you want to go through, but I'd have thought you'd be growing headcount if you're accelerating the top line.

Elie Girard: Well, you know that we have a strong objective of profitability, Michael, so, we work a lot on our productivity.

There is the automation play that Michel-Alain mentioned, again and we're leading there, so clearly, we try to do more with less people, and we also want to reduce our restructuring. So the rule in the Company is we wait to get the order before hiring people. So we're managing that very, very closely, very precisely, with Charles and all the CEOs in the business unit.

Thierry Breton: We should say, Elie, sorry to interrupt, but every Monday and our ExCom we're following this and the key, obviously is productivity, productivity, productivity.

Operator: We will take our next question from Gerardus Vos of Barclays.

Please go ahead. Your line is open.

Gerardus Vos: A couple of questions, if I may, just coming back on the kind of growth, because I think everybody's been a bit surprised by the tick up during the quarter and congratulations on that. How much of that do you think is macro driven, how much is additional sales you've been adding through the year and how much is it from the offering? So what I'm trying to establish here, how much of that is sustainable improvement during the year? And then, secondly, clearly this has some implication for the utilization rate on the cyclical business. Would you be able to share some data with us how that's tracking in Q1? Thank you.

Thierry Breton: I will take the first one and Elie will take the second one. To be honest with you, personally and maybe I'm the only one in the Company, but I'm not surprised with this performance and again, I will have been better to be at 2%. But why do I say that? Because I see and you keep hearing this now for a few quarters, that we're winning market shares which is, by the way, where we expected in our book to bill ratio. We're winning market shares over competitions, for, I think, a few reasons, but the main of it is definitely our offering. We definitely focus our position with our digital strategy, differentiating ourself, being able to monitor end-to-end solutions with a cybersecurity umbrella which is absolutely critical and I really could tell you that all the goals we have experience as B1 on our competitors.

But again, I think we should do more and this is what I will present to you, with the team, for our next Atos day, in H2. Eli, for the second question?

Elie Girard: Sure. So, on the utilization rate, Gerardus, we were, in Q1, in C&SI at 82.3% and we were more around 80% in the past. But what I want to add here is that these numbers are, of course, the global utilization rate. What is important that we're working very precisely to increase the individual utilization rate which was one of the issues we had in Germany in the past and this is also what is largely improving, to free up people, to be able to sell them again to the customers.

But the number is 82.3% for Q1, in SI.

Operator: We will take our next question from Laurent Daure of Kepler. Please go ahead. Your line is open.

Laurent Daure: I have a couple of questions.

The first is on Unify. Since you closed the deal I was wondering if you find anything surprising one way or the other. Making sure so that the losses you were expecting for last year I think was €45 million. The end, the year ended as expected and the timing and when do you think you will start to be posting the first profit during the year? If we could have a timing which quarter it will be. So that's the first one.

Second is, I know you don't publish restructuring every quarter, but it would be useful just to know, from what you saw in the first quarter, you are in line with the €150 million of restructuring for the year? And my final question is on the book to bill, now which indeed was quite strong for first quarter. So if you have a breakdown between the renewals and the new business will be helpful there, as well. Thank you.

Charles Dehelly: I will take the first part, on Unify. We didn't see any unexpected difficult, very - or because we had intensive due diligence, so that means no news here.

And the plan is on track or slightly ahead of track. We have control of the company for two months only, but so far it's okay. Perhaps two positive elements, [indiscernible] we're ramping it up within Siemens and perhaps, also as a positive, is the R&D team supporting CFQ. It's a very large team of young, talented people, developing everything, using agile development techniques. It's spectacular and I think that's very positive, so we're quite optimistic on that.

While we didn't plan anything special in our business plan, that's a positive we saw. No negative. I'm very pleased with the team we put in place and John Pritchard, the CEO and so, that's where we're after two months, but a good--

Thierry Breton: Charles, we could say that we had in fact, to - how should I phrase it? To clean up the management and we did what we had to do. And for the rest, the team is extremely solid and we were able to extract extremely talented people and personally I'm pleased, very pleased with the team.

Elie Girard: So on the numbers in Unify, so indeed the year 2015 finished roughly with a minus €45 million operating margin for the total Unify.

We expect as soon as 2016 to be back positive. So you remember that we're targeting for the services part, the managed services part, that we integrate within managed services service line to be roughly at 10% operating margin in 2016 and to have Unify S&Ps of 200 platforms, to have an income at roughly €10 million, so meaning that and we expect also a positive free cash for the total operation in 2016. So we're not waiting for 2017 to turn around the operation. Of course 2017, we would have a full year impact of all what we're doing in 2016. So that was for your first question.

On the restructuring, the answer is, yes, we're perfectly on track to achieve the €150 million cash restructuring rationalization integration. That's a strong commitment, after €238 million in 2015, partly due to the integration, as you remember. Do we're on track? Of course. What we're trying to do and you will see that in the results at the end of H1, is to advance as much as possible the restructuring, within the year, to have, of course, to optimize the impact in the margin in the full year. So you will see, certainly, at the end of H1, a cash restructuring rationalization and an integration cost which will be much above the half of the €150 million for the year, but we're perfectly in line that, to this €150 million target.

And on the last question, book to bill, Patrick will answer.

Patrick Adiba: Yes, so on the book to bill, clearly we're still above 50% on new business. As Thierry said, we're winning market share, winning new contracts and so above 50% on new business. And then the rest on fertilization and renewal, renewal being still in the low 30%, 25%. So, a lot of new business and new contracts across clients and geographies.

Thierry Breton: But Patrick, I should say that I think we could do better in fertilization, because we have a lot in our hands and we're training our people to sell everything, including in BDS, including everything we have in hand, so we have room for improvement in fertilizations.

Patrick Adiba: Absolutely.

Operator: We will take our next question from John King of Bank of America. Please go ahead. Your line is open.

John King: Just three questions, if I can. First, coming back on the spread of growth by industry, the public sector seems to have had a pretty good performance and I think it's more than 100% of the growth in the quarter. Could you just dig in again as to what's driving that? Which regions? And perhaps there's some ramp ups in contracts that's helping you to a better result there? The second one was on the managed services business and clearly you're navigating well at the moment through the shift to the cloud. I also wanted to get a couple of words from you on the shift towards automation here. I guess you've got a workforce management practice there.

How big a business is that for you and what implication does that have? Does that put any pressure on you to ramp up restructuring as you shift more towards an automated workforce management? And the last one was just around some of the - you probably saw some of the press reports on the BBC contracts which I think is one of your bigger ones, for in your next year. Could you just give us an early view as to how that's progressing and what you think the risks are for the BBC renewal? Thanks.

Thierry Breton: I will take the last one quickly and then Michel-Alain will take the second one and Elie will take the first one. For the BBC and Charles, we're following this extremely carefully. By the way, we were very pleased with the statement as the CIO of BBC made a few weeks ago saying that one way or the other, we will continue to be in this process, because we - sorry, the CFO, sorry.

It wasn't the CIO, it was the CFO. We're extremely, extremely strong and have extremely good links, hey, Charles, with the BBC. But of course, as you mentioned, this is a renewal and by the way, this is the business we're in. We're renewing businesses. We're almost a €13 billion company and we're renewing a business contract every month.

This one is expected to be renewed next year, for an impact in 2018. But we're confident that we will continue to serve BBC. Every time I go to London I'm going to see them, Charles also. We have a strongest story and we will continue to support them, but of course, this is in their hands. Michel-Alain, maybe the second questions for John?
Michel-

Alain Proch: So, yes two things, I think the automation part is a key element of our digital edge strategy.

It's affecting our strategy at several layers. The first layer, actually, we have already launched it more than two years ago. I was mentioning it to Brice. It's a layer within the infrastructure, in which we're replacing mostly server management by software and as I was saying, the software of IPsoft, with which we have a very strong partnership. The second element of automation is now in the part of end user services and help desk, on which we're working.

We're still at a level of a POC. I think in the industry we're the most advanced and the capacity we have, I mean, obviously this is going to take out people from our operation and the equation is working, because we're winning market share. I mean, that's the important part. We're the people who are working into this job are retrained and replaced into the new contract we're winning. And I think the example of the agri-chemical leader we have signed in North America infrastructure is at the very heart of the strategy, a full automated and orchestrated offer, Patrick which is representing our largest order entry for Q1.

So you see, we're winning market share in that case, without naming the competitor. It was a U.S. company.

Thierry Breton: And Michel-Alain, but the way, together with Charles, we knew, of course, that the trend of the business could be declining, so for us, the only strategy is to win market share. And that's why we decided, very early to invest in new technologies, differentiating offerings and automations and to be the first one to do this, because we know that we don't have any other chance but to win market shares and to help our customers to progress in this extremely important business for them and including with everything we bring into the secure way we're proposing their digital journey on our infrastructure.

Elie, maybe the first question?

Elie Girard: So in the public and health sector, there are three geographies to your question that have been growing double-digit in Q1. We've got the U.S. and you know that in the U.S. not we got with [indiscernible] IQ a big private company, private customers contract, but also very important contracts with the local administrations, state administrations in Texas, Michel-Alain and the quite many counties across, throughout the U.S. We've got also France and I think I mentioned that earlier, especially in SI, through a strong push in SI in France, above 6% overall, with a double-digit growth in the public sector for several ministries.

And we've got a very high growth in the public sector also, in Germany, for several here also, federal and local administrations.

John King: Can I just follow up on the workforce management question? Could you just clarify how big a part of the managed services is that business at the moment?

Thierry Breton: No, I think, John, we'll get back to that one. I mean, I understand your question, but we'll get back to that at the end of this year when we do our analyst day, because we will give you how we're going to structure, as a Company, for the years to come.

Operator: We will take our next question from Alex Tout of Deutsche Bank. Please go ahead.

Your line is open.

Alex Tout: Could you just describe the pricing environment that you're seeing at the moment? I think it's been a recurrent theme of the offshore vendors that they've been seeing gross margin declines despite a healthy FX benefit. Are you seeing that being reflected in the pricing in competitive bids, particularly with those players, but more generally? And then also on the infrastructure side, is there an impact from public cloud that you're seeing on pricing of infrastructure deals? And which would you say is more of a challenge, the offshore challenge on the, more on the consulting and SI side or the public cloud pricing impact on infrastructure? Thanks very much.

Elie Girard: So on the pricing topic, both on systems integration and managed services, especially cloud, we do not see any acceleration change, neither in SI nor in cloud. And beyond that, anyway, we're fighting.

We're struggling through technologies, automation orchestration and technologies we mentioned earlier, with Atos Codex, in particular. So there is the pricing on one side and we do not observe in the market any acceleration. On the other side we're really accelerating on the technology front.

Thierry Breton: Just a competitive advantage that we developed is our transfer fallow free, where, instead of making just, for instance, for the transition of SAP HANA, it's a good example. Instead of just making managed services on SAP R3, we sell the computer with a video, we sell the managed services, we sell SI to trans - to move R3 on HANA and we even sell consulting, so that means we compete with the much broader of strategies to compete with much broader rather the value offering than before and which helps us to win on the marketplace.

It's a key access of our strategy.

Operator: We will take our next question from Georgios Kertsos of Berenberg. Please go ahead. Your line is open.

Georgios Kertsos: Most of my questions have been answered.

A housekeeping last one from me. Within the managed services service line can you share with us the revenue contribution from cloud and what is for cloud the year-on-year organic growth? Just to put it into perspective, I think the equivalent FY 2015 number was around €550 million. Thank you.

Elie Girard: So in cloud we achieved a 32% growth in Q1. What is very important that we give you this figure, but what is really the most important is that we don't have on one side a piece of cloud contract, on the other side a big legacy contract.

The cloud is now everywhere, integrated and embedded in most of our contracts. And why are we struggling, as Michel-Alain explained, on the orchestration? It is precisely because it allows to marry the two words, the legacy and the cloud, but to answer your question, 32% on the cloud in Q1.

Georgios Kertsos: And in terms of the nominal value of revenue?

Elie Girard: We're targeting for 2016 above €700 million.

Thierry Breton: Above, yes, above.

Elie Girard: Above €700 million and we're well on track in Q1.

Operator: [Operator Instructions]. Our next question comes from Stephanie McCauley of Credit Suisse. Please go ahead. Your line is open.

Stephanie McCauley: If we looked at the calendar and the number of days, do you think there could be a one to two day working day benefit in the second quarter? Does this match up with your thinking? And what will the impact on organic growth be for the second quarter?

Elie Girard: There is no real impact because in managed services which is I think, 8% of the Group, you don't have impact from the days.

It's not correct. It's extremely minimal, so. [Indiscernible] neither and BDS neither, there is no impact from this.

Thierry Breton: So I think this will end this call. So thank you very much for being with us this morning.

Thank you for your questions. So, I'm probably the only one in this room thinking that we could have done better, but you can count on me to push the team to do even better in Q2. Thank you and looking forward to see you at the end of this semester. Thank you.

Operator: Thank you.

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.