Executives: Thierry Breton - Chairman, CEO and Chairman of Worldline Elie Girard - CFO Eric Grall - EVP, Global Operations and TOP Program Patrick Adiba - Group Chief Commercial Officer and CEO of Olympics & Major Events Michel-Alain M. Proch - Senior EVP and CEO, North American

Operations
Analysts: Mohammed Moawalla - Goldman Sachs Group Inc. Gerardus Vos - Barclays PLC Laurent Daure - Kepler Cheuvreux Stacy Pollard - JPMorgan Chase & Co. Michael Briest - UBS Investment Bank Adam Wood - Morgan Stanley Amit Harchandani -

Citigroup
Operator: Welcome to the Atos First Half 2017 Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Thierry Breton, Chairman and CEO. Please go ahead.

Thierry Breton: Good morning, everyone. Good morning, ladies and gentlemen. Thierry Breton speaking.

Thank you for attending the Atos conference call on the results of the first half 2017. So I'm going to share this presentation with Elie Girard, our group CFO; Patrick Adiba, in charge of Global Sales; Eric Grall, our head of Global Operations; and of course, Michel-Alain Proch, our head of U.S. operation and SEVP, with us by phone from the U.S. since he's busy with many customers. And by the way, I will go just after this meeting to go back to see Michel-Alain for important business meeting in the U.S.

So I will start with the highlights and key figures of H1 2017. And we'll developed also the technology leap that the group achieved during the first semester. Then Elie will go through the operational performance and our financial results. Patrick will address the group commercial activity and Eric will detail some of our recent operational achievement. And of course finally, I will come back to conclude and we will then start with the Q&A session.

So under first 3 slides are some of H1 highlight that I would like to develop with you. First, from a technologic standpoint. I believe that Atos made fairly significant moves during this semester. A few weeks ago, we had in Brussels the second edition of the Atos technology days. It was a unique opportunity for our clients to discover and to discuss the challenges of the data security together with our security experts and to discover the new generation of high-performance technologies.

During these days, we made 2 very important announcement, reinforcing our leadership in Big Data & Cybersecurity, materializing the entitlement of Cybersecurity and High Performance Computing, in particular, with quantum computing. First, we launched our new prescriptive security operational centers combined with Atos Big Data analytics and artificial intelligence capabilities and powered by bullion servers. This new solution makes it possible for customers to predict security threats before the event occur. Second, we launched the Atos quantum learning machine. The world's first commercially available machine system capable of simulating up to 40 quantum bits or qubits.

The Atos quantum learning machine or Atos QLM enables researchers, students, but also all engineers to develop and test today the quantum applications and algorithms of tomorrow for cybersecurity, artificial intelligence and so on. Finally, I am glad to present the strong partnerships signed over the semester in order to boost global leader sale of our bullion in-memory servers with 3 major global IT manufacturers, Cisco, Dell EMC and Hitachi. Recognizing the bullion technology advance, these partners have agreed to sell our in-memory servers to their own customers, notably to fuel the growth of the SAP HANA market. Through this ecosystem, we have already generated a significant pipeline of new deals. As you can see on the next slide, in H1, we continued to strongly execute our strategy towards our 2019 Ambition.

In particular, after plus 2% organic growth in Q1, we achieved 2.4% in Q2. The strong start of the year shows the sustainability of our revenue trend, confirming our full year objective to be well above 2%, in line with our 2% to 3% ambition. The industrialization plan of our business and solution platform activities is well advanced and the shift to high-value Digital Transformation project is well underway. It already started to materialize in H1 figures, notably with plus 2.6% organic growth and with a profitability improved by 120 basis points and Elie will come back on this. The integration of Unify SNP is now going full speed.

It further reinforces our digital workplace offering with unified collaboration and communication solutions. These offerings already generated first wins and active pipeline, notably as we continue to leverage on the successful Siemens migration to SIMATIC and to deploy the next generation 911 emergency solution into the U.S. Moving to the next slide. All of it supports our profitable growth. First, our sustainable commercial momentum comes from the few -- full alignment of our Digital Transformation Factory offerings to the demand of our clients.

Indeed, while our client need currently to go through many vendors offering slowed IT legacy and digital offerings, Atos proposition is one, integrated end-to-end offering, covering all needs of our clients to implement their digital transformation, but at their own speed while keeping the global consistency at cost and specs. Key words on the macro environment like I always do. Now so we continue to benefit from improving visibility and of course, as you all know, primarily in Europe. The election of our new President in France created, as you have seen, a new dynamic in France, better so in Europe and his economic program has received the satisfaction of IMF and also of Moody's. Any labor market reforms should have beneficial effects, but also, as you have seen results, the tax reforms he want to implement which will probably attract new capital coming from external countries.

All in all, for us, in Atos, it is undoubtedly very supportive for our French operations. Also in Germany, the anticipated positive economic outcomes from the elections in September should materialize in the business of our operations where we enjoy a leadership position, thanks to our partnership with Siemens and our leadership position in industry portfolio. In the U.K., it is a little bit more uncertainty, as you all know and probably this uncertainty will continue to go. But we continue to have a very good momentum and visibility, thanks to our strong exposure to the public sector in defense, in manufacturing but also in retail. Regarding Brexit FX, I remind that fortunately enough, we have very low exposure in Financial Services.

Finally, we have very strong teams in the U.K., always able to transform challenges to opportunities and to continue generating profitable growth like in H1 with good plus 3.4% organic growth. In the U.S. now. The ObamaCare and tax reform delays illustrate the difficulties to start major reforms. As a result, the U.S.

GDP growth should not exceed the current 2 plus -- 2.5%. And in that context, our U.S. teams under the leadership of Michel-Alain recorded the strongest commercial performance of the group in Q2 with Michel-Alain and outstanding book to bill close to 170%. And therefore, I expect a strong H1 -- H2, leveraging on our technological offering in Hybrid Cloud Orchestration, automation, cybersecurity and so on. So this is why we plan a Q3 above Q2 and Q4 at 4% to 5% organic growth.

Just as a reminder, we're not impacted by the important restriction in H1B Visa regulations. Finally, in terms of M&A, we have a strong pipeline in line with our strategic priorities which are acquisition for Worldline, in continental Europe like the one we announced yesterday evening, but we'll continue to penetrate new geographies as it was done for Equens. And again, as when we did yesterday evening in the Baltics. We will pursue this strategy to build at our own pace and to enforce at the right price our pan-European payment business to Worldline. That's why you can be prepared to see new enhancement in the next few months.

We will also look at additional technologies. The acquisition of Digital River World Payments in Sweden is a good example as it provides a state-of-the-art online payment platform. Cautiously but constantly, we're determined to build the strongest payment company in Europe with banks and merchants as partners. Then, United Services in the U.S. to coastal System Integration projects on our infrastructure and data management customer base to increase the business in targeted verticals as we did, for example, with Anthelio in the healthcare sector.

Showed acquisitions through the enhancing our technology leap, for instance, in Big Data & Cybersecurity. Finally and marginally, any acquisition enhancing shareholder value as we did in the past through a sizable turnaround. So you see that we have the full financing capabilities. And as you can better understand now, we're very busy in potential new acquisitions. So let's move now on Slide #8 and let me get to these figures.

So revenue reached €6.3 billion, increasing by 12% at constant currencies and plus 2.2% organically. Revenue grew, as I said, by plus 2.4% organically in the second quarter, materializing the good sales momentum in our digital offerings. So sales dynamics were strong with order entry close to €7 billion, representing 9% increase year-on-year and a book-to-bill of 109%, of which 120% in Q2. These figures marks the alignment of our comprehensive Digital Transformation Factory with rising client needs. Regarding our profitability.

Operating margin was up 21% year-on-year and represented 8.5% of revenue, a strong increase by plus 190 basis points. We continue the next slide with other key figures. Net income group share stood at €211 million, a strong increase of plus 25% compared to first half, 2016, obviously, excluding the sale of the Visa share. This led to an EPS of €2.01 per share, up by plus 22% year-on-year. I would like to draw your attention on a very important point.

The total number of our employees decreased by minus 1.5% over the semester. In Atos, we're very cautious on every new recruitment and we follow this indicator, by the way, week after week at the executive committee. Indeed, with, Automation, robotization, machine learning, artificial intelligence, all along the digital chain which impact everything, Infrastructure management, better applications, system Integration and also consulting. I have to prepare with my HR organization and lead by Philippe Mareine to this major change to come in our industry. In other words, do more with less people but much more qualified.

In this perspective, I took the commitment to remember to continue to increase our revenue during the next 3 years, in our 3 years plan, but with a stable number of employees. This is a major change for all of us and that's why I implemented with HR and talent management, having policy based on the strict discipline to hire mostly experts and to skill our employees through our in-house universities and on processes. While implementing this change, we commit to decrease or to keep flat our restructuring charges to, as you know, a maximum 1% of revenue over the next 3 years. Therefore, we already generate roughly the same level of revenue that our main competitor with less people and already for some of them, half of their number of staff. Then, one word on free cash flow, we reached €242 million, translating a strong improvement of the operating margin conversion to cash reaching 45% compared to 40.5% in H1 2016.

Group net cash, finally, position was €342 million at the end of June, after having paid €168 million dividends from 2016. With this positive cash position, the group keeps a strong capability to finance future development and new system. On the next slide and before leaving the floor to Elie which will comment on these figures, I would like to introduce a new section, maybe a 3, 4 slides that I intend to do at each publication on the key technology announcement of the period. I think that this should allow you to understand a bit better what we're doing in this field, since we're extremely busy and I think it's important for you, if that's okay, to understand what we're doing in this field. Today, I wanted to update you on a very hot topic, cybersecurity.

This is a business area where we developed high-added value division answering the big demand from our clients. Where we intend to reinforce our leadership as we're now are considered by analysts, #1 in Europe and #4, worldwide. Indeed, from the rise of Cloud to the disruption of IoT, the digital world generates massive interconnection and data flows, increasing dramatically the exposure to cybercrime as the growth of the attacks you expect is exponential opening a larger playground, let's say, to hackers. No companies are immune from blue chips to SMEs all firms are at risk. The first cybercrime is growing exponentially.

Ransomware attacks represented €1 billion last year with 4,000 attacks per day, 71% of the target infected and 70% of them paid the ransom. More than 3 million data records are compromised every day and cybercrime costs are projected to reach up to €2 trillion by 2019. More than ever, companies need to establish and maintain the highest level of security in order to survive the data deluge and to fight cyber threats. Also, the European regulation aim to strengthen and unify data protection for all individual. By the way, you know that next year, if you -- if a European company has been attacked, if you can demonstrate that the board then take the right decision, then the company will pay very important fine.

That's a European regulation. Companies are therefore starting to invest and they have to, more heavily in cybersecurity moving from an internal response to a managed security services reports to protect their business with a large spectrum of response from security operations and [indiscernible] and encryption to identity management. As you can see, on the next slide, we developed an holistic cybersecurity offering. In security governance, we assess security risk. We're involved in crisis management.

We make audit and penetration test, we ensure privacy regulation compliance and we also sales cyber insurance for major customers. In secure communication, our global offerings provide data security and IoT security. In situational awareness, we protect our customers through our own security operation center, together with cyber emergency response teams. Finally, our offerings cover also digitally identity and access management solution. Moving to the next slide, to deliver the highest level of trust, security and privacy to our customers, we built an outstanding operational capabilities with more than 5,500 cybersecurity experts in our operations, 14 security operation centers spread over 5 continents, 3 million secure entry points and 100 million security events managed per hour.

To achieve this, we leverage an advance scientific and technological community, our access to multibillion yearly R&D spending through an extensive network of partners and obviously, on our R&D investment in -- and IP. By the way, I'm proud to have celebrated last semester, with our scientist the 5,000 patents of the group. Our leadership is clearly recognized by industry analyst. As for example, Nelson Halls ranked us #1 in Europe. Next slide, finally, at Atos, security is at the heart of what we do, controlling every step of our clients, data journey and we have a clear technological road map in this area.

Which is by the way normal, since we're the leader in data management in Europe. We process the data for our customers. We have to protect them also. Big Data technologies, including machine learning and artificial intelligence at all levels are now required for added protection from the endpoint to the Data Centers and the Cloud. In the new generation of prescriptive security operations centers that we announced at the beginning of the month, we can expect that in some years, 95% of the events will be analysed and processed by robots.

They will be able to define an automated response. Human beings will spend their precious time on tweaking key and hazardous events featured by machine intelligence. To do so organization have an ever-growing need of computing power, Atos as in [indiscernible], with 75 petaflop delivered in 2017, but we need to anticipate the limit of physics. And we at Atos are already has performed of entitlement of quantum computing and cybersecurity. Last year, we announced sequana, pioneering the road to exascale, collective security solution for earlier risk detection.

This will go one step further with the first quantum learning machine and the first prescriptive security solution able to analyze weak signals before as a threat. But this announcement are just one step in our strategic innovation journey. Right now, our team are already working on the next step that you will see in 2018, advanced machine intelligence and deep learning technologies and the road to artificial intelligence and quantum safe encryption to create encryption technologies able to assist to the future progress of quantum computing. That's what I wanted to share with you today. And now, Elie, the floor is yours to comment on our financial performances.

Thank you.

Elie Girard: Thank you, Thierry. Good morning, everyone. Let's start with the reconciliation between statutory and organic figures for H1 revenue. Exchange rates negatively contributed by €44 million -- minus €44 million.

This mainly came from the British pound, partly compensated by the U.S. dollar and the Brazilian real increases. As such, revenue at constant exchange rates grew by 11.6%. Scope effects amounted to plus €518 million. This was mainly related to the positive contribution of Unify services for the month of January.

Unify software and platforms for 6 months. Anthelio for 6 months Equens, PaySquare and Komercni banka for 6 months. And to a lesser extent, Engage ESM for 6 months and zData for 5 months. Corrected from scope effects and exchange rate, the group revenue then grew by plus 2.2% in H1 and plus 2.4% in Q2. These effects are also reflected in the operating margin at constant scope and exchange rates, in particular, scope effects amounted to minus €34 million for operating margin, mostly due to the loss-making Unify SNP operations in H1 2016, before the completion of the restructuring plan by year-end.

On the next slide which is more for your record, I wanted still to show the revenue organic growth evolution in the last quarters. We performed our 11th quarter in a row of revenue organic growth. More importantly, we have a trend which is sustainable now above 2%. The next slide presents the performance by division. I'm going to comment it in the next 4 slides for each of them.

But in a nutshell, all the divisions contributed again to revenue organic growth, thanks to a strong commercial momentum materializing the investment strategy in innovation and technology with a special mention for Business & Platform Solutions which showed a clear acceleration since the beginning of the year. Compared to our 3-year plan, Infrastructure & Data Management is fully in line with the 0 to 1% CAGR range of the plan. Business & Platform Solutions is well positioned to enter into the 3% to 4% range of the plan. Big Data & Cybersecurity is already above the 12%. And finally, Worldline made in H1 a better-than-expected performance and will move to the 5% to 7% of the plan as of H2.

Overall, the group accelerated in Q2 to 2.4% organic growth and posted in H1, 8.5% operating margin rate, almost 2 points above last year H1 pro forma of 70 basis points versus last year H1 reported. On the next slide in Infrastructure & Data Management which includes Unify SNP since the beginning of the year. Revenue reached €3,589,000,000 up by plus 0.9% organically, of which 1.0% organically during the second quarter of the year. Revenue growth was significant in Cloud services and in technology and transformation services. In addition, the division is actively involved in the transformation of its key client IT landscapes through automation and won some key contracts as part of the Digital Transformation Factory supporting growth in several geographies such as North America, Asia Pacific as well as Germany.

Growth materialized primarily in the Public & Health sector, notably in North America, thanks to increased volumes and additional scope from Oracle Exadata implementation for the Texas Department of Information Resources as well as new contract in France with Naval Group in the French Atomic Energy Commission. Financial Services benefited from the ramp-up of large contract sign last year such as Aegon and the national savings in investments in the United Kingdom, KAS BANK and BGZ in the Netherlands and AXA in France, while growth in Asia Pacific was supported by higher volumes and large deliveries with SEB in Hong Kong. Manufacturing Retail & Transportation posted a solid performance in several geographies, fueled notably by the new contracts with Ingemetal in Germany. Monsanto in North America as well as AkzoNobel and NXP in the Benelux and the Nordics. And Royal Mail Group in the U.K.

The situation in telecom Media & Utilities remained challenging, in particular, in the U.K., impacted by some scope reductions with BBC. But in spite of fierce competition, the U.K. team managed to renew our contract in Q2 and all parts which were under tender. Operating margin in Infrastructure & Data Management reached €329 million in the first half of 2017, representing 9.2% of revenues. This improvement of 240 basis points came from successful migrations to cloud-based infrastructures from automation and from industrialization.

The division also performed the successful integration of Unify services and the execution of the restructuring plan of Unify as a whole. Operational profitability improved in all geographies. The performance was mainly driven by Germany, benefiting from Unify as I already mentioned. In Benelux and the Nordics and also in France, operating margin benefited from a better business mix, whereas North America showed a very good performance, thanks to an increased operational efficiency. Finally, in the United Kingdom, operational margin increased, thanks to the ramp-up of new contracts and the strong focus on the cost base.

Then, Business & Platform Solutions on the next slide. Revenue reached €1,608,000,000 and accelerated its organic growth trend, up plus 2.7% in Q2 after plus 2.5% in Q1, well above the 0 plus growth of 2016. The division increased its competitiveness, thanks to a more efficient workforce management and the implementation of our global delivery industrialization program. Eric will come back to this in a few minutes. The division is also shifting to high-value Digital Transformation project and revenue growth was led by Digital Transformation Factory, in particular, with the implementation of industry 4.0 solutions for large manufacturers.

Growth was driven by Manufacturing, Retail & Transportation which recorded a good performance in all geographies and particularly in Germany which benefited from the development of SAP HANA and Codex activities, notably materializing in the automotive sector with Daimler and Volkswagen. This added to the ramp up of several contracts in Central and Eastern Europe such as Coca-Cola Hellenic. And in Asia, such as Betagro. Public & Health was also growing particularly in Middle East and Africa, thanks to the last delivery phase of the contract with Polymix and successful products activity in major events and in Asia Pacific. Telecom, Media & Utilities also posted a good performance in Germany and also in Italy, thanks to Codex solutions sold in the Energy sector.

In Financial Services, the business was more challenging in France, Iberia and Central and Eastern Europe with less projects performed this year, while in Germany, the division managed to stop several new projects in mobile application development and customer external services with Deutsche Bank. Operating margin was €98 million, representing 6.1% of revenue. The strong improvement of 120 basis points was attributable to the good revenue performance that I just described, combined with the effects in most geographies of cost savings and successful workforce management actions. France, North America, Iberia and South America managed to improve operational margin, also thanks to the application services, industrialization program. Overall, Business & Platform Solutions continued its positive trends, but in revenue and margin, while investing in innovation and new Codex and SAP HANA offerings to deliver the planned operating margin enhancement.

Next slide, regards Big Data & Cybersecurity. The revenue growth remained there particularly strong in H1 with 13.8% organically, of which 14.2% in Q2, leading to €357 million. A strong performance was recorded in the U.K., North American and France, largely fueled by strong HPC activity with customers such as the Science and Technology Facilities Council, the Atomic Weapon Establishment, the Oxford University and with Gence and the CEA in France as well as large clients in manufacturing. Cybersecurity activities were also very dynamic, notably pulled by contracts with large customers in North America. For instance, with Xerox.

And in Germany, for instance, with Nokia. The sock activity, as Thierry mentioned earlier, it sales more than doubled versus H1 2016. Operating margin was €43 million at 12.2% of revenue. The division achieved to maintain a high level of margin while continuing to record significant growth and investing on innovative solutions and products as well as extending its international footprint. Let's turn to Worldline on the next slide.

Worldline contributed revenue to Atos worth €757 million, improving by plus 2.3% organically, of which plus 2.6% in Q2 2017. Merchant Services & Terminals, was up plus 5.2%, notably thanks to Commercial Acquiring which benefited from increased volumes of transactions, a better price mix and a strong momentum in India, following the demonetization act. The recently acquired companies PaySquare and Komercni Banka recorded positive business trends and contributed to growth. Financial processes expanding by plus 6.1%, thanks to the higher transaction volumes in acquiring processing, notably in France, but also in Italy and increased revenue for services in issuing processes. The activity account payments also increased along with transaction volumes of SEPA payments in the Netherlands and in Germany as well as significant volume growth on ideal activity in the Netherlands, a business operated by Equens.

Mobility and e-Transactional Services was impacted, for the last time, by the Radar contract. Excluding that effect, the growth of the business would have been -- would have exceeded plus 1 -- was 11% in H1 compared to minus 9.3%, fueled by increased activities in Trusted Digitization, robust growth in e-Ticketing and finally, double-digit growth in e-consumer and mobility. Operating margin was €114 million or 15% of revenue, improving by plus 240 basis points compared to the first semester of 2016, largely driven by the revenue growth of fast delivery of Equens Worldline cost synergies. And finally, a €7 million pension one-off in the U.K. The next slide presents the revenue evolution by geography.

During the first semester, revenue organic growth materialized almost everywhere. In North America, thanks to the ramp-up of several contracts in Infrastructure & Data Management with Hybrid Cloud migrations, especially in Telcos, Media & Utilities into an increasing business in cybersecurity. More importantly, while revenue growth was circa 1% in Q2, absorbing a still decreasing SNP business, North America had a book-to-bill close to 170% also in Q2, mainly in the area of the Digital Transformation Factory which converts the trend for the next quarters. Thanks to strong actions to reduce the cost base and to the transition to the Cloud, the operating margin reached 10.7%, making North America the most profitable geography of the group. Germany grew by 1%, thanks to the delivery of several projects.

Notably, the implementation of industry 4.0 solutions and the automotive sector and mobile applications in Financial Services. Revenue of Infrastructure & Data Management was impacted by the integration of Unify SNP which should represent an upside as we plan to improve Unify revenue during the second half of the year. Operating margins strongly improved led by Infrastructure & Data Management, benefiting from the execution of the Unify restructuring plan, as well as continued strong actions on cost optimization. Business & Platform Solutions confirmed its recovery, thanks to the strong revenue growth and continued workforce optimization. U.K.

and Ireland with plus 3.4% organic growth confirmed the positive trend recorded in the second semester last year. Infrastructure & Data Management improved, benefiting from the ramp-up of new contract such as Aegon, as well as continued strengthening of Digital Workplace solutions for key long-standing customers and new cloud engagements. Business & Platform Solutions growth came from an increasing demand for SAP HANA project. Big Data & Cybersecurity had a strong momentum through increased business in Cybersecurity and HPC activities. Operating margin reached 9.4% of revenue through Tier 1 Program actions.

The business unit managed to maintain a good level of profitability despite some contractual price reduction in IDM. In France, revenue was stable, thanks to new contracts and infrastructure in data management. And in Codex keep offerings in Business & Platform Solutions for automotive and energy customers. Big Data & Cybersecurity posted its positive trend with the strong demand in the HPC area. Operating margin is strongly improved by 180 basis points, with Business & Platform Solutions improving its average daily rate and Infrastructure & Data Management benefiting from contract with customers migrating to a Hybrid Cloud platforms.

Big Data & Cybersecurity maintained a solid level of margin while continuing to invest in new innovative solutions and products. Finally, the business unit benefited from strong transactional cost saving actions, including in real estate. In Benelux and the Nordics, revenue continue to recover in IDM, benefiting from higher volumes and contracts ramp-up in Manufacturing and in Financial Services. While revenue of B&PS was stable in Benelux, the deviation was affected in Q2 by a comparison basis on this contract delivered to the Polish administration last year. Operating margin reached €46 million, representing 8.7% of revenue improving by 230 basis points.

Infrastructure & Data Management operating margin was driven by favorable business mix, coupled with a strong monitoring of the cost base. Business & Platform Solutions as well as Big Data & Cybersecurity profitability were affected by revenue decrease. In Other Business Units, the activity continued to grow up plus 6.8%, particularly in Asia which registered a strong growth in all divisions, thanks to additional volumes with SEB, ramp-up of new projects in B&PS such as the Taiwan University games and in BDS with new HPC opportunities in the public sector. Middle East and Africa where the activity was also very dynamic in both B&PS and BDS, benefiting notably from respectively the ramp-up of the last phase of the contract with Polymix and new HPC opportunity in Africa with public administrations. Central and Eastern Europe was strongly fueled by higher volumes and new projects in Manufacturing Retail & Transportation with notably Coca-Cola Hellenic and with the rollout of Digital Workplace in Italy with customers in the Energy sector.

And I already commented for Worldline. On the next slide and Thierry mentioned it in detail, the total headcount of the group was 98,480 at the end of June 2017, reduced compared to more than 100,000 at the end of 2016. Our hirings were decreased to anticipate the implementation of automation and to focus on Digital transformation skills when monitoring the attrition rate, broadly stable at 11.8%. In parallel, the group pursued the digital training and reskilling of its teams with a strong increase of certification in this field. As an example, in Big Data & Cybersecurity, stats increased by plus 8% over H1.

Let's move to the net income on the next slide. Reorganization, rationalization and integration cost represented €82 million and were mainly related to the adaptation of the group workforce in Continental Europe, North America and the U.K., the related closure of both these premises and data centers consolidation. This amount also encompasses external cost linked to the continuation of Worldline's team program, cost related to the execution of Unify, Equens and PaySquare, post-acquisition integration and the migration and standardization of internal IT platforms from last acquired companies. The amortization of the equity-based compensation plans amounted to €45 million compared to €22 million in H1 2016. The increase was related to the group's scope extension, the stock price evolution as well as the achievement of performance conditions.

€62 million were recorded as purchase price allocation amortization compared to €45 million in H1 2016. The increase being mainly related to Unify SNP, Equens and Anthelio. Other items amounted to a charge of €22 million compared to €42 million plus €43 million in H1 2016 which included the gain on the sale of Worldline share in Visa Europe to Visa Inc. for €51 million. Net financial result was a tranche of €32 million at the same level as in H1 2016.

Total tax charge was €56 million, representing an effective tax rate of 18.9%, down again compared to 19.8% in H1 2016. As a result, net income was €239 million. Noncontrolling interest amounted to €28 million and were mainly related to the minority shareholders in Equens Worldline as well as those in Worldline. Therefore, the net income group share reached €211 million, plus 25%, that was H1 last year, excluding the sale of the Visa share. Let me now comment the free cash flow figures on the next slide.

During the first half of 2017, capital expenditures totaled €235 million, representing 3.7% of the revenue compared to €202 million in H1 2016 or 3.5% of the revenue. Contribution from change in working capital was negative at minus €37 million compared to minus €24 million in H1 2016, mostly due to the acceleration of growth. Total cash-out for reorganization, rationalization and integration was €101 million compared to €96 million in H1 2016, in line with the full year objective of 1% of group revenue plus the cost to generate synergies with Equens Worldline. As a reminder, this cost is planned around €20 million this year. A large portion of reorganization, rationalization cost was pulled forward into H1 in order to optimize the impact on the full year operating margin.

Tax paid was minus €64 million, a decrease by €10 million compared to H1 2016, mainly thanks to the use of tax losses carried forward. Net cost of financial debt paid was €13 million. Finally, other items totaled €19 million in H1 2017 relating to other financial expenses and several settlements. As a result, the group reported a €242 million in H1 2017, growing by plus 35% versus H1 last year. I move now to the next slide showing the cash conversion.

Last semester, we continued to improve the conversion rate from 41% to 45%. This was mostly reached, thanks to a larger operating margin combined with lower tax rate. We're, therefore, well underway towards the full year objective of 55% to 58% this year compared to 52.5% in the last year. As a reminder, our full year operating margin objective and conversion rate to free cash flow are both without expansion one-off effect. Turning to the net cash evolution.

You remember that statutory net cash position stood at €481 million at the end of 2016. Since then, we restated the presentation of Worldline intimidation activities for minus €51 million. We also integrated Unify SNP with a net debt position of circa €100 million. As such, the restating net cash position at the beginning of the year was €329 million. Free cash flow in H1 2017 was €242 million, as I just commented.

During the last semester, we spent €12 million in acquisition, in particular for zData in the U.S., reflecting the implementation of an employee shares plan and the exercise of stock options, the capital increase totaled €31 million in the first half compared to €21 million in H1 last year. And in the first half of 2017, the cash-out for dividend payment amounted to €168 million, the increase compared to last year mainly reflecting the increase of dividend for €1.10 with the option to receive it in shares last year to €1.60 per share paid fully in cash this year. At the end of the semester, we spent €8 million for share buyback and foreign exchange rate fluctuations, represented a decrease in net cash of €72 million, mainly coming from the U.S. dollar versus the euro. As a result, net cash position stood at €342 million at the end of the semester, slightly increasing versus the restated opening position.

I will finish my presentation with the next slide showing the main items of the group balance sheet. Restated to include Unify SNP and the change on Worldline's intermediation activities presentation, there is no major change in the main items of the balance sheet compared to the end of last year. All in all, the total asset of the group at the end of June this year amounted to €13.1 billion. Thank you very much for your attention. And now Patrick, the floor is yours.

Patrick Adiba: Thank you, Elie. Good morning, ladies and gentlemen. This is Patrick Adiba. I will start my presentation with the key commercial figures of the semester. The commericial activity has been very strong with the total group order entry reaching almost €7 billion in H1 2017, plus 9% growth year-on-year and it represents a book-to-bill ratio of 109% for the semester, of which 110% in Q2.

In line with the dynamic commercial activities, a full backlog at the end of June 2017 amounted €22.2 billion, plus 14% year-on-year and representing 1.8 years of revenue. The full qualified pipeline was €7 billion compared to €6.3 billion, 1 year earlier and representing 6.7 months of revenue. On the next slide, on the various components of the Atos Digital Transformation Factory, Atos has been recognized as a leader or a visionary, setting us as a key player to support the journey of our customer to their business transformation. Turning onto the next slide. I would like to illustrate the success of our Digital Transformation Factory by commenting some of the main wins.

First, BBC which is cloud transformation with Atos Canopy composed on Decision Digital factory and Digital Workplace. Another one is Northern Ireland electric, a range of cross-services including desktop management, Application Management, ICT infrastructure, hosting and voice and data network services. Ilunion in Spain, the consolidation of 2 SAP systems on a HANA transactional environment. Siemens awarded us a new contract for Digital Workplace and integrated service desk in 49 countries in Asia. Next one being HSBC with Atos Codex where we will deliver realtime actionable insights to HPC relationship manager across HSBC 5 global regions.

so the scope is around providing intelligent dashboard to client managers in order to deliver a better service to their customer. Safran which is a contract focus on cloud and security services combining the expertise of IDM and BDS. And finally, in payment service for Worldline, we deliver to Belfius, a smartphone contactless payment solution for iPhone and Android smartphones with a strong feature for security and authentication. Moving to the next slide, I would like to highlight 2 example in which we combine many Atos expertise to deliver high-value business outcomes to customers. First, with a European industrial equipment manufacturer that I can't name for the moment.

By combining cloud orchestration capabilities with advanced cybersecurity technology, we're at the same time enabling a better efficiency and more agility while keeping data totally protected. And with a testing and certification company, we sold our Codex predictive solution to face multiple business challenges, set up a single platform for lab testing, leveraged petabytes of data, progressively cover a network of facility around the globe and therefore providing a unique predictive testing and certification capability. Finally, on Unify, on my next slide. We're accelerating our business actions on the various axis presented last quarter. On the white space which is the Atos client base, we closed our first contracts and continue to grow the pipeline.

On Circuit, we have reached 517,000 users on the base of dozens of customer from big enterprises to SMEs and we continue to leverage a successful Siemens migration to Circuit. In France and North America the pipeline is going very rapidly and we can report 2 main wins on the Next Generation 9-1-1 emergency solutions. Finally, the partner network continued to grow, reaching 2,812 partners at the end of H1. With those elements on Unify, I now close the commercial activity part and pass it over to Eric.

Eric Grall: Good morning, everyone.

Thank you, Patrick. Eric speaking. Our Orchestrated Hybrid Cloud offering continues to grow in line with our expectation by more than 30% in H1, fully consistent with our 3 years plan trajectory. In H1 2017, Atos has also introduced 2 major a new set of cloud offerings as part of our orchestrated cloud. In May, we announced the availability in partnership with Dell EMC, on-premise private Azure Cloud solution complementing and reinforcing our hybrid capabilities for Microsoft customers.

Atos also introduced 2 new shared cloud offerings for classic SAP and HANA application workloads. Both offerings have been built up on leveraging our market-leading bullion platforms. Finally, we continue to successfully deploy our hybrid cloud capabilities for very large enterprises. The use case in this slide illustrates a contract we signed with one of our large customers in H2 2016 and that is now in full deployment. It had been the result of a key win where we took over the legacy scope from two of our largest U.S.

competitors. Leveraging our Atos Cloudification methodology and India factory, we're addressing in total over 7,000 applications and 3000 databases for the customer. In the end state, the new service mix will split between 50% from Atos Digital Private Cloud, 20% from public cloud, in this case, Amazon, 18% from legacy mode and the rest from transformation and consolidation services. Moreover, Atos is also managing, on behalf of that customer, the public cloud partner and Atos provides the end-to-end management for all application, whether they sit on the Atos legacy, on the Atos Digital Private Cloud or on the public cloud. This is a good example confirming what was presented at the last Investor Day on how our customers are migrating to cloud.

On the next slide, I would like to come back on our IDM automation program we presented in November 2016. It is progressing as expected and aligned to our objectives supporting the 3 years plan. In H1 2017, we have been able to increase our account coverage above target. We have now 121 accounts, largely among our largest ones, while we have started the automation deployment. It is an account-by-account approach because the technology we deploy enables an immediate set of benefits.

But then, our teams, who are very close to the specificities of each account, have to further enrich the associated intelligence of the tools to generate incremental automation, even if some of the tools like Arago also embed a machine learning approach. We have achieved so far an average 47% automation completion with the customers where we started the rollout of the automation. In the most advanced accounts, we have been able to reach up to 68%, largely in the areas of incident management and automated change and service request. Within our Atos Orchestrated Hybrid Cloud solutions, we have also deployed now more than 100 standardized service requests that can be applied universally across any workload or application, deployed on our Atos Digital Private Cloud or on any public cloud such as Amazon and Azure. This is done behind a single pane of glass in our Atos portal based on service levels.

Let me conclude now by giving you an update on our industrialization of application services, codename project RISE internally. And for which you got already your first view in the February call of this year. It is a key lever for our ambition for B&PS to deliver, at group level, the 70 basis point improvement as part of the 3 years plan. At the end of H1, we're absolutely on track to achieve RISE objectives. RISE has already significantly contributed to the 120 basis point improvements in H1 for our B&PS business that Elie mentioned earlier.

Across the year, we will leverage RISE to redeploy and to reskill more than 1,000 employees towards the new digital activities or towards other growing B&PS activities. On the non-redeployable capacity, we will use restructuring but fully within our overall group guidance of maximum 1% of revenue per year. As part of RISE, global resource management is now fully operational to manage the demand, supply and efficiency redeployment of our 32,000 B&PS staff. I have decided to shift this end-to-end responsibility to India in order to accelerate our globalization. More, our automation factory in India has already produced 250 RPA use cases.

RPA standing for robotized process automation. And they are being leveraged already in our top 25 B&PS accounts. We're also completing the development of our automation platform, so-called for the time being, the Atos Intelligent Automation Platform for the lack of a better word. And we will have a version 1 fully released for deployment in the second half of 2017. Overall, through RISE, we're now accelerating the shift and focus of B&PS towards digital transformation, fueling our growth on the 4 pillars such as Codex and SAP HANA.

Thierry, back to you for the conclusion.

Thierry Breton: Thank you, Eric and thank you all. So one word to conclude. All in all, with our reinforced technological profile, our very solid balance sheet, our very well balanced geographical footprint and the quality and dedication of our Digital technologies, we're, I believe, perfectly positioned to accompany the digital transformation of our clients at their own speed with high visibility and resilience. This macro environment and the strong start of the year comfort us in our ambition.

In that context, we fully confirm all our objectives for the year. Thank you all. And we're now ready for the Q&A session.

Operator: [Operator Instructions]. We'll take our first question from Mohammed Moawalla from Goldman Sachs.

Mohammed Moawalla: Thierry, I'm wondering if you could sort of comment around your expectations on the evolution of organic growth. We've seen this progressive acceleration in the organic growth. And as you've stated an ambition to grow above 2% for the year. But as we look at the second half, where aligned headwinds go away, so that should meaningfully accelerate. The environment obviously is pretty good and your business and platform solution businesses is on an accelerating trajectory.

So as you look at that, do you feel that sort of organic growth can be kind of closer to the sort of 3% as you exit the year and sort of more in the 2.5% to 3% in the second half? Or is there anything we should be mindful of that could potentially be a headwind? And then secondly, just curious around your thoughts on the M&A side. Obviously, there's a lot of consolidation within payments happening. And I know Worldline is going to be pretty active on that, but as you look at the kind of core IT Services side, is there sort of been any change in terms of your preferences of maybe larger captive acquisitions versus maybe more the medium-sized consolidation within the U.S. market? So that will be helpful.

Thierry Breton: Thank you, Mo, for your questions.

So first, obviously, as Elie show you, MO, over the past 11 quarter, we grew quarter-after quarter. And each quarter being a little bit better than the previous one. So obviously, Mo, I intend to continue on this plan. Just one indication for you. You know that we have -- we integrated S&P at the end of Q1.

And I should tell you that, of course, without S&P on our pure IT businesses it will have been, of course, better or much better than what we presented, even if, Elie, we know we will start to grow and to be positive in Q4 with S&P. So this is an indication I could show you -- I could give you. But, of course, you understand that we intend to continue to progress and step by step and that I am confident that we will achieve it, are very confident. Now regarding M&A. Mo, we -- first, for Worldline, I just want to say one word.

We continue to look at everything. When I say everything, it's really everything. But we're cautious, we're -- we want to create the value for our shareholders, not to give the value for, for example, a private equity companies. I love private equity companies. But I prefer my shareholders.

And that's why, we're not ready to pay what we don't understand, including for the last acquisitions that you maybe heard. We looked at everything, including this one and we decided that the price was just not for us, in case for our shareholders. This means that we continue to look at it. We'll continue to make a big chunk of acquisitions in Worldline. We have a very strong pipe.

But again, if you see a good one, we're ready to do with. We have the balance sheet for that. We have the stock for that. We have everything. But again, we will do it.

And believe me, we will consolidate the European payment landscape at our own pace and with the best profile for our shareholders. We'll continue to do this, Mo. I can assure you. For the pure IT Services part, here also we're extremely busy. We look with Michel-Alain, some small or mid-sized acquisitions.

And, again, as I said, I will be tomorrow with him in the U.S. But it's true also that I continue and personally with my team, to look at a larger or much larger acquisition, if it makes sense. We have here also a pipe and it takes also some time from my time, including oblige me to travel a lot. But I'm confident that we will find things which will make sense again for our shareholders, believe me. We have the ability to do that and we have also, Eric, the team, to integrate and I believe that now since I'm running the company for more than 9 years, we have created a strong DNA to integrate companies.

And, of course, we will use this. Thank you, Mo.

Operator: Will now take up the next question from Gerardus Vos from Barclays.

Gerardus Vos: Just going back on the kind of the U.S. business and could you just explain me a bit more kind of the headwinds in kind of the second quarter and how that will impact Q3 and Q4? Then, on the reorganization, could you remind me how much you expect to spend on reorganization this year and longer term? And finally, just a quick question on the €22 million in others, what was exactly in that?

Thierry Breton: Thank you, Gerardus.

First, I will take the second one. Michel-Alain, you will take the first one and Elie will take the third one. And so for the second question, Gerardus, we intend, as I said, to spend a maximum 1% and we're exactly on our plan, Eric, to do this. This is a maximum that I will authorize to do this. I just told you that, by the way, that I strongly believe that our industry, our IT Services industry, is entering into a new era where, as I explained and Eric explained, robotization, automation will be the key word or artificial intelligence, machine learning, will be the key word.

And, of course, we will have to do more with less people. That's -- and more trained people and this is exactly the processes that I explained and Eric explained. Philippe Mareine is here. We're spending a lot of money for -- to retrain and reskill our people. If we believe that some will be better out and we will let them go with the right amount of money, thanks to our restructuring reserve that we have.

But this is a trend that we have to anticipate and that we anticipated, but no more than 1%. That's really what I have put as a maximum in our company. Michel-Alain, you can take the first question for Q2. And of course, we're very positive for Q3 and even more for Q4. Michel-Alain M.

Proch: Yes, Thierry. Hello, Gerardus, this is Michel-Alain speaking. So yes, indeed, in the second quarter of the year, the growth of North America was a bit tired and that's due and that was affected by Unify S&P organic decrease. You know that the U.S. market for unified communication is extremely competitive.

Most of our competitors are U.S.-based. Unify, we will introduce the market with Unify a new Unify communication as-a-service-solution in Q3. And I believe this is a very important offer that we will issue to the market. So expecting Unify to stabilize by the end of this year and as Elie was saying, growth. On the rest of the business, we had a very strong commercial activity during the second quarter with the book-to-bill at 117%.

I just want to underline 3 very sizable deals that we have signed in the last months of the quarter, full hybrid cloud with Allscripts which represents an extension of scope of and renewals. This is the same type of hybrid cloud, Gerardus, that we have sold to Monsanto and to Texas DIR. A second deal, a digital workplace this time with enterprise nationals, so this is a net new contract. And again, that's the same type of offers of the Atos transformation factory that we have sold to Johnson & Johnson in Q1. And finally, a large infrastructure deal with GTA, so Georgia Technology Association, I'm sorry which is the same that we've sold to Texas DIR.

So you see here, there is a pattern of applicability of our offer. So net-net, when I look at the deal we've closed in Q2 and the pipe we have for the second semester which is first, healthy and well-qualified, that's one thing; the second thing is the stabilization of the Unify top line. And the growth in the end of the year, I'm expecting North America revenue generating a Q3 better than Q2 and a Q4 in the range of 4%.

Thierry Breton: Elie, the last question?

Elie Girard: Sure. Hi, Gerardus.

So on the line, other, you've got other financial expenses and you have several settlements that we cannot disclose for obvious commercial reasons.

Operator: We'll now take our next question from Laurent Daure from Kepler.

Laurent Daure: I have three questions from me this morning. First one is regarding your sales growth in the coming quarters. I mean, you had pretty good order entry in the first half, growing 9%.

Can we have a bit more detail between the renewals and the new deals? Just checking if there was momentum and the new deals is the same as your order entry? Your second point -- second point is, there's a lot of positives U.S. even if Worldline which are going to help in the second half. But then, I'm just wondering what could be the negatives, for example, the Middle East or Asia-Pac was. Is it sustainable or not? And my final question, M&A strategy, you said again this morning that you want to grow more with fewer people. So how do you put your M&A strategy with regards to this comment?

Thierry Breton: Thank you.

Thank you, Laurent. So I will take 2 and 3 and Patrick will take 1 if that's okay. So Patrick, you start with the order entry between the new and the renewal?

Patrick Adiba: Yes. Absolutely. So you know this year we had several renewals so they are pretty much behind us in H1.

So -- but in H1, we have also a lot of new logos in the Slide 32 and I described the wins, there's a lot of new logos. Something to highlight as well is that in terms of pipeline, the pipeline -- the current pipeline for H2 is heavily loaded with new logo or, what we call new existing, meaning new business with existing clients. So pretty much no renewal in H2. So I think we'll continue with the same dynamic and with a very healthy pipeline.

Thierry Breton: So for your second question.

As you know, we have a good operation in Asia, in Asia Pac and in Middle East and Africa. And I will continue to grow our operations, by the way in Africa. We already discussed this. So we don't -- I was in Singapore 3 days ago and I review our operations. I don't see any downside -- potential downside.

We have good momentum there. We expect to have a good or if not very good, second half, growing in second half. And to be -- I understand your questions but again, just to mitigate your concern, I will say unfortunately so far, this is not a huge part of our business. So this is an answer to your potential concern. If we had, let's say, a geopolitical problem in this region it will not impact us and we will be able to cope with other GBUs.

But regarding the solidity of our business, we'll continue to grow quarter-after quarter and that's a very solid one. By the way, Laurent, I'm also looking at opportunities in this region, as I told you and I continue to look, it takes time and we'll continue to look, including for potential capacity if we can see it. Now for the number of people, for the third question. Again, what my comment is that -- and I'm discussing with a lot of people in our industry and we're all facing this problem. I mean, this is not related only for Atos.

We're now all entering into a phase of our industry where we need to do more with less people. That's just thanks to technology, thanks to robotizations, thanks to everything we provide, we just have to be prepared and it is our duty and it's my personal duty to prepare the company to this new trend of our industry. This means that, by the way, that we will continue to look at opportunities. It's true that we're not looking for -- just for a company because of their huge number of people, this is not what we're looking for. We're looking for companies.

If that makes sense to us in terms of geography, in terms of technology, in terms of know-how and expertise and that's basically what I'm looking -- so I'm not looking for a company just to buy people for people of course. I'm looking for a company which will make sense to us. And by the way, when we make an acquisition, Philippe Mareine who is here, we pass everyone through our same rules and regulations, including reskilling process because again, this is what we have to do for everyone to be prepared for the next challenge to serve our customers. Thanks, Laurent.

Operator: Will go take the next question from Stacy Pollard from JPMorgan.

Stacy Pollard: Just to dig in on a few details. Can you talk about the outlook for France in particular in the second half. And why you think you might be able to bring the revenue growth up just slightly. And then looking -- digging in on margins, margin in Big Data & Cyber was down a little bit. What you think is the unachievable rate in the mid term, of course on a full year basis, not just for the half year? And then also on margins which geographies are most likely to see further margin upside? I guess I was looking at France and Germany being somewhat below the group and maybe what the potentials are there?

Thierry Breton: Thanks, Stacy and I think Elie, those questions 3 are for you.

Elie Girard: Thank you, Thierry. Hi, Stacy. So in France, we expect an acceleration in H2. If you look back over the last 18 months, you will see that France has been signing lots of deals and with a book-to-bill above and sometimes far above the average of the group. Just to mention 2 deals which were signed in this semester, the first one, Safran which was a new, new deal.

We entered into this very big account. We started to deliver successfully. And this will ramp up in H2. EDF as well. So that's why we expect an acceleration of the top line in France in H2.

Regarding your question on the operating margin of Big Data & Cybersecurity, so here over the full year, we're in line with our 3 year plan which is to continue growing above 12% which is very high level of growth and which is above the market. We're gaining market share in all the segments of Big Data & Cybersecurity while stabilizing the margin -- the operating margin, roughly around 15%, 16%. So this is what we expect for the full year. Then you can have some fluctuations from quarter-to quarter semester-to-semester. And the last question which was about where we expect improvement or where is some upside on the operating margin in the geographies, I should say everywhere because we run this company globally.

And when we talk and Eric mentioned the RISE program which is the B&PS application services industrialization program, it concerns all the geographies. And there is a potential to improve the operating margin in all the geographies, I mentioned B&PS but not only B&PS. Automation is happening across the group of course. We mentioned earlier Benelux and the Nordics, for example which was a bit softer in H1 compared to other geographies on the top line. Nevertheless, Benelux and the Nordics managed, with a very tight control of cost, to improve its operating margin.

So we're confident that we will improve the operating margin pretty much everywhere.

Operator: And I'll take the next question from Michael Briest from UBS.

Michael Briest: A couple for Thierry first. If you think about the environment today versus where it was at the start of the year, the puts and takes of Continental Europe versus the U.S. and U.K., do you feel that the environment, the market backdrop, is actually better today than how you expected it to be at the start of the year? And then secondly on automation, I think there's a statistic there that for some customers you're automating 47% of roles, can you talk about what the consequences are for pricing on those contracts and margins, presumably the customer expects to share in the benefits that you have? And then finally, just on the bullion and HPC business, it seems to be doing very well, I guess, related maybe related to Stacy's question, what sort of margin do you get on the hardware that you're selling? Is it above group average, is it accretive to the division or below the software part to cybersecurity?

Thierry Breton: Thank you, Michael.

So I will take the first question. Eric, you may answer Michael the second one. And on the margin on our BDS product and services, Elie, you will take it. So in terms of environment, my answer is definitely, yes. We're today in a better environment.

And, of course, especially in Continental Europe and that's for sure that we were, let's say, before Q1. And after all the events that occur in Q2, especially in Continental Europe, the mood is much better and the mood also for companies, I could tell you, is definitely much better in Continental Europe. I mean, in the U.K., you know this, as I do, we already discussed this. We're waiting for the Brexit discussion. And, obviously, there's a lot of questions in the U.K.

I understand that some of the bank, Bank of America, decided to move a lot of staff, I understand in Ireland. I understand that Deutsche Bank decided to, this morning, to have a big move in Frankfurt. So that creates, of course, some uncertainty and especially in the finance industry, that's abused. And we see this definitely in the U.K, that's why we keep focus in the U.K. on serving the government.

We have a lot of new contract with the government, especially in defense. I already spoke about it, but -- and our team is extremely active here. And in the U.S., we all wait for finally the new tax reform. I think it will create a momentum. Today, we don't see it.

And that's for sure, there is some cautiousness in the U.S. a little bit waiting for this bill to be passed. And also, the new injections, the new -- the $1 trillion injection in infrastructure is also expected. When will this happen? I don't know. This could be probably a boost.

But this being said, in terms of business and Michel-Alain could also say it, this is good even if it could be probably better. So overall, I should tell you that for us, we're more confident today, in terms of environment, that we were, let's say, a few months ago. Eric, for the margin after automation?

Eric Grall: Yes, sure. So Michael, 2 elements or 2 dimensions to my answer. The first one is that on our installed base, as we roll out automation in our client base, it is effectively improving our margin.

And this is in fact what we embarked largely in our 3 years plan in terms of margin improvement for both IDM and B&PS. And that is fueling our trajectory in operating margin for the 3 years plan we presented. Second, for new contracts, most of new contracts are embarking in the pricing effect if there's a benefit. We expect to deliver, from the pricing perspective, to customers which means that it enables us to also have very competitive price. And therefore, fueling also our growth in top line and organic growth with new contracts.

So basically helping our bottom line as part of our 3 years plan.

Elie Girard: Thank you, Eric. Hi, Michael. This is Elie. On your last question regarding the margin on Big Data & Cybersecurity products, I confirm it is accretive to the group operating margin.

Thierry Breton: Thank you, Michael. Maybe 1 or 2 more questions, it is already

almost 09:30.

Operator: We'll now take the next question from Adam Wood from Morgan Stanley.

Adam Wood: I just wanted to dig in a little bit further on the automation side. Very interesting talking about the improving margins and lower pricing helping you win business.

Could you maybe just go into a little bit more detail in terms of the scope in IDM and B&PS? How much of that business do you think is automatable today? And as those technologies mature, how much more significant do you think that could be in terms of scope across those 2 businesses? So how much further could you go? And is there any way you could quantify a little bit the year 1 and year 2 benefits you're seeing? I know it would be a massive generalization but just to give us some feel for what's possible with those technologies.

Thierry Breton: Good, Adam, I will answer the beginning and then Eric will add a few comments. And by the way, also, if Michel-Alain, you can say also what you see in the U.S. because we see also this, of course, everywhere and including in the U.S. So we're -- Adam, we're definitely, I think, at the beginning, we believe that -- and I'm cautious with that, but thanks to our very big operations in IDM, of course and we're maybe the front-runner at least in this part of our industry.

And we started already. We were, I believe, one of the first ones to start. We're at the beginning. It's probably too early to give you exactly the amount. But personally, my view is that within the next 3 to 5 years, a big part, if not -- or most of the part, the way we do it today will be more or less automized.

So this is a new cycle we're entering in. This is true again everywhere. And by the way, it's not only in IDM. It's true -- all along the chain it's true in SI. It's true in -- including and consulting by the way, we see that now with machine learning or let's say, artificial intelligence is growing everywhere.

And this is -- for us it's absolutely mandatory to start now because again, this is what our customers are requiring. And this is also the way we will continue, as Eric said, to serve better our customers and to improve our margins. Eric?

Eric Grall: Thanks, Thierry, you're absolutely right. And to complement what you said effectively. As you see, we're still in the early days.

We're reaching, as we deploy in the range of 40%, 45% automation level. We have seen, in some accounts, going above 60%. And we continue to do so. And when you look at the overall IDM business of down the road, a very large part is subject to automation and to bringing machine intelligence and community solutions into the environment, that would take several years. But I would say that a very, very large part of our perimeter in IDM and in everything we do also in application services and maintenance services within B&PS as well as in BDS, in our security solutions, thanks to our new prescriptive solutions with machine learning, we're going to continue to increase the automation and bring that associated value to the customers.

So the scope is still fairly large at stake and we're just at the beginning.

Thierry Breton: And by the way, Adam, I -- you know, we launched now this new quantum learning machine and we have now teams in-house, but also outside in the academic environment, working on new algorithms using specifically the Qubits in order to have specific algorithms which will be very useful in artificial intelligence in the years to come in specific areas. And believe me, we have first meeting discussions with a lot of people. Michel-Alain, maybe you can say one word of the way you see this in the U.S. Maybe it will be helpful also for Adam.

Michel-Alain M. Proch: Yes, sure, Adam. Sure, Thierry. And hi, Adam. Yes, clearly in the U.S., we have been in the -- on the forefront of automation.

And when you look at the last deal, we've signed, I've mentioned 3 major hybrid cloud in the last 18 months and 2 major Digital Workplace. These 5 deal, all of them have a large amount of automation. And here, I just want to give credit to Eric who actually, more than 2 years ago -- or 3 years ago actually, decided to make this platform with ServiceNow which is allowing us then to distribute automation solution throughout our estate. So it's not something, Adam, that we see in the future. We're actually selling it.

And it's a key differentiation compared to our competitors. We're selling it and we're implementing it.

Thierry Breton: By the way, we see this also that -- we see this also in terms of security and cybersecurity, we used to have only experts, I said that we have many experts, 14 security operational center experts, that were done, let's say, manually, before our prescriptive platform which is really using robotization trying to detect the new signal, even low signal. When, in average, this is not us but for all the industry, when one for our customer was infected by a virus or a worm or whatever, it took, on average, roughly 250 days, 250 days to discover or to start to see the impact. Today, with the platform we have, we may see this within a few hours.

And then, of course, avoid the kind of damage that it will create. So that's -- on one hand, it will create again new opportunities for us and for our customers in terms of pricing and margins. But also, in terms of quality of delivery, the kind of protections that it needed now behind the way we have to process the data on our own data center or in the cloud to protect again our customers. Maybe the last question. It's already more

than 9:30.

So last question?

Operator: We'll now take the last question from Amit Harchandani from Citi.

Amit Harchandani: Amit Harchandani from Citi. Since its the last one, maybe I'll just limit myself to a quick question and a follow-up. So the question is with respect to the U.K., looking into the second half of the year, do you anticipate any Brexit-related weakness outside Financial Services, for example in retail or potentially even in the public sector? And secondly, as a quick clarification, can you confirm that the pace of increase in automation that you're seeing today, is it fully in line with your ambitions for your 2019 target? Or is it actually happening faster than you anticipated?

Thierry Breton: Thank you for the two questions. So for the first one in the U.K.

definitely. And we see this but we're not the only one, of course, [indiscernible] -- I mean, there's a strong -- a lot of expectations and uncertainties in the financial services. So that's for sure, that here we see some delays or questions with all our exposure in financial services. That's probably the place we're today which is the biggest impact from the uncertainties on the Brexit. And for the, RISE, as I said -- but Elie, you want to add something maybe.

The team of -- our team was led by are doing -- is doing a tremendous job. We were able, by the way, to renew all our contracts including the famous BBC contract and in good conditions. The quality is high. But I don't want to lie. I mean, there is some uncertainty in U.K.

and I will prefer personally not to have the Brexit but now we have to deal with it and we have to do what it takes. But again, for us, the biggest exposure, of course, are around problems in the financial services. The second question -- maybe you want to add, Elie?

Elie Girard: Just very quickly on deals. We have, in the U.K., a very high pipeline of deals to be signed as soon as H2. There are big deals in there.

And it's across the sectors in both public and private sector. So we'll see. But there is really, I think, historically, Patrick, we've never had such a big pipe in the U.K. to work with.

Patrick Adiba: I can confirm that it's one of the strongest ever in the U.K.

Elie Girard: Yes.

Thierry Breton: Thank you. And then for the second question, we plan -- on our 3 years plan, we already anticipated automation and robotization. That's why again, if you remember for our last Investor Day, I said that we would like to make the plan with the same number of people, even if we go between 2% to 3% during the payout organically. So it means that, of course, we anticipated already and believe me, we had a lot of discussion [indiscernible] to anticipate, including Philippe Mareine, with all our reorganization of the way we will skill our people internally.

So we anticipated definitely, clearly, it's part of our plan. But maybe, I think personally that it goes a little bit faster than we thought. And from all existing -- the sign, we have now, it's going, for me at my level, faster than what I thought. Maybe, Eric, you want to confirm this?

Eric Grall: Yes, I do confirm. And in fact, you saw in our presentation that we have been so far executing ahead of plan.

We intend to stay, of course, ahead of plan. And if we can do so, it should effectively bring some upside down the road for the 3 year's plan. But again, we have a plan to deliver the full 3 years plan. If we can continue to stay ahead of the plan, it should brings some benefits.

Thierry Breton: Thank you.

And so thank you all for being with us today. I take -- I would like to take the opportunity to thank you to follow us; and also for the one who will take some vacation, to wish a good vacation. But I know that it will be very -- probably very short vacation for everyone. So that's why I wish you a good rest and we'll be happy to see you and to listen to you in 3 months. Thank you all.

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