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

Operations
Analysts: Laurent Daure - Kepler Cheuvreux Mohammed Moawalla - Goldman Sachs Brice Prunas - Exane BNP Paribas Gerardus Vos - Barclays Capital Adam Wood - Morgan Stanley Michael Briest - UBS John King - BofA Merrill Lynch Derric Marcon - Societe Generale

Thierry Breton: Good morning ladies and gentlemen. Thierry Breton speaking. Thank you for attending Atos conference call today for our result of 2016. So, I'm going to share this presentation together with Elie Girard, our Group CFO, Patrick Adiba, in charge of global sales and also here in the room, Charles Dehelly and Michel-Alain Proch, SEVPs. I will start with the key figures of the year.

Then I will quickly update you on the Group strategy and present the 2017 guidance. Patrick will comment on the Group commercial dynamism. And Elie will develop the operational and financial performance for 2016. Finally, I will come back to present our main priorities for 2017, the first year of our three years plan, before starting, of course, the Q&A session. So, in 2016 we achieved an excellent performance, by overreaching all our financial commitment.

Atos delivered revenue growth across all sectors as well as record margin improvement and free cash-flow conversion. On the first slide, you can see some of the 2016 key figures which reflect well the very solid performance that we reached this year. I'm very confident that next year, this year, will be even better. Revenue reached €11.7 billion, increasing by 13% at constant currencies, and plus 1.8% organically. Revenue grew by plus 1.9% organically in the fourth quarter, materializing the good sales momentum in our digital offering, and the continued revenue-trend improvement.

The sale dynamic was strong and the group order entry reached a record €13 billion. This represented a 16% increase and a book to bill of 111%. In Q4, book to bill reached 119%, a figure demonstrating a strong commercial activity, materialized the alignment of our comprehensive digital-transformation factory with rising client need. Now, for profitability. Operating margin reached €1.104 billion, up plus 20% compared to 2015, representing 9.4% of revenue.

This represented a strong increase by plus 110 basis point at constant scope and exchange rate. We continue with the other key figure on the next slide. Net income group share stood at €567 million, representing a strong increase of plus 40%, compared to 2015. Even excluding the one-off contribution of the Worldline share in [indiscernible] Europe, this represents the double of 2014 net income group share as we committed to at our investor day mid-2015. This led to an EPS of €5.47 per share, up by plus 36% year-on-year.

The total number of employees was above 100,000 at the end of the year. This year we have welcomed more than 8,000 colleagues of Unify, Anthelio and Equens. Free cash flow reached €579 million, which is above the objective of [indiscernible] million that we raised to above 550 million in July when we published H1 figures. This translates a strong improvement of the operating margin conversion to cash, reaching 52.5% in 2016, compared to 43% in 2015. Elie will explain the components of the margin conversion to free cash flow as it is, as you know, one of our most important financial indicators.

Finally, Group net cash position was €481 million at the end of 2016, after having paid the acquisition of Unify, Anthelio and Paysquare. With this positive cash position the Group keeps a strong capability to finance further development. Next slide is here more to remind you our 2016 objective that we initiated in February, raised in July, and finally over-achieved. You know the DNA at each level of the Group is to always deliver on our commitment. In this context, the Board of Director decided to propose the payment in 2017 of €1.60 per share as dividend on 2016 result.

This is a strong increase of 45% compared to last year, and the double of the 2014 dividend, in line with the net-income evolution. Contrary to previous year, the Board decided to propose, of course, at the AGM, the dividend will be fully paid in cash; meaning no dilution for our shareholders this year. With this record performance, Atos team have built a unique foundation to deliver our new three-years plan, 2019 Ambition, matching new expectation of our clients; gaining new market share, driving more profitable growth and cash generation, while continuing to enhance value creation for our shareholder. So, let's move to the next three slides. Things and world is a bit moving these days, so, we decided to have these three slide on which I would like to underline that our Group has been carefully designed year after year, and you know that because I keep discussing this when I meet each of you, to bring a stronger visibility and resilience in a, we should say, less-predictable global environment.

And to benefit from the strongest growth trend, thanks to our global positioning with our digital-transformation platform. Indeed, the world is currently facing big changes and uncertainties in term of economy, border control, currency evolution, and, of course, technological breakthrough. Let's focus on some key areas, starting with one of our largest geography, which is, of course, the continental Europe. In this area, GDP growth is expected to improve pretty much, if I read the last, latest IMF release, which will clearly benefit to Atos thanks to its global footprint in Europe. This footprint is well represented by our bylaws that we changed, as you know, in 2012 to become one of the first Societas Europaea, European Company.

I am myself, as a strong advocate of such European companies. And I was appointed as Chairman of the Association of European Companies, ASEP, in Brussels regrouping all companies having these bylaws and not any more their national by laws. Then, as the Group has no financial debt, we are not exposed to the medium term expected increase of interest rate. It will happen, as we all know, one day. In addition, we are a very close partner of the European Commission in many initiatives such as the European Cloud Partnership that I chaired a few years ago, together with the SAP CEO.

We are also closely involved in all European technological initiatives, from cyber security to high performance or quantum computing. And, most of the time, in the driving seat as, for example, with the our Group CTO being the Chairman of the European Cyber Security Organization. All of this makes us perfectly well positioned to seize the increase up to 2% of every single European country of European GDP in defense and cyber security. As, in each country. Which is, by the way, what NATO request now for all European country.

In the U.S. now in the post election context we position ourselves to seize the opportunities of positive forecast on GDP growth. And to benefit from any upcoming corporate tax relief. And from the major need for local [mech] technologies and digital transformation offerings for U.S. company.

We are deeply rooted locally to serve our large American clients with our mechanical engineers. We have more than double our staff, by Michel Alain, on the American ground between 2013 and 2016 with almost 9,000 U.S. employees, probably making Atos the foreign IT services company which increased the most in 2016 employment. I am personally deeply involved in the U.S. ecosystem, being a member of the Business Council, where CEOs of important U.S.

companies working in the U.S. meet regularly. I will, by the way, be there tonight for a meeting tomorrow in Washington DC with my colleague, CEO of the largest U.S. corporation, in the context of the new U.S. administration.

The third large geography is the UK in the post Brexit context, where the GDP growth now is expected to slow down, as you know. That regard, Atos is really protected by a business model relying on multiyear contract, as we are a long term partner of our British client and, in particular, in the public and defense sector. The Brexit process is expected to last, at least that is what is said, more than two years. But thanks to our low exposure to discretionary expenses and to the financial service sector, we expect to continue growing in this geography. And we are naturally hedged to GDP evolution as most of our costs are in the UK in pound.

As a long term partner of the public and defense sector, Atos, with its more than 10,000 UK engineers, is also perfectly well positioned to benefit from the large public investment program announced in the UK. On the next slide, let's focus on the new currency and border control. The group is naturally hedged to currency fluctuations, in particular, on the Indian rupee versus U.S. dollars, GDP or euro, as we built a delivery model with most of our cost generated in countries of our client. So far Atos in the U.S.

is focused on infrastructure and data management, Michel-Alain, and, of course, digital-transformation sector. Therefore, we consider all the non-U.S. IT players' potential restriction in H1B and L1 visa grants is not an issue for us. Indeed, out of our 8,400 U.S. employees, only 151 are under H1B visa and 154 under L1 visa.

The information, of course, are public for industry. Regarding the potential raise of the border tax in the U.S., I remind you that Atos in the U.S. does not rely on massive off-shoring overall. Costs from India are less than 4% of U.S. revenue.

Cost from Mexico is less than 2% of U.S. revenue. And cost from the Philippines are less than 2% of U.S. revenue. That means that our model is to serve our customers in the U.S.

from the [indiscernible]. We have established very strong relationship with major U.S. universities in order to recruit the best engineer in our company, reaching our competitiveness with more automation, and high-skilled specialist. All in all, if restriction of H1B and L1 visa materialize and if border-tax increase, Atos would benefit from this new environment. The third and last slide of this section is on the new technological environment.

As already said, our group is organized to embrace the global digital transformation and booming demand in that field, notably thanks to the digital-transformation factory that has been presented to you during the last investor day. Thanks to the four pillar of this platform of IT digitalization we can leverage our technological partnership in Europe, both with Siemens [indiscernible] and so on, as well as in the U.S., Dell EMC, Microsoft, AWS and so on to answer all our client need, seize all digital-transformation opportunities. And be fully adapted to the change of the world that is front of us. We have built year after year a group up to reap the high growth of the digital-transformation wave with strong visibility and resilience; able to manage complexity and uncertainty which benefit from its local footprint. Our unique, fully end-to-end digital-transformation model generates organic growth, while providing significant cost reduction and productivity increase to our clients, leveraging a technology and partnership focus on cybersecurity and cognitive computing.

Moving to the next slide, we share then our 2016 record result would not have been possible without the now Tier 1 technological profile of Atos. Indeed, we designed a group able to embrace the global digital transformation, thanks to an accelerating innovation effort in cybersecurity, automation, analytic, mirroring the booming demand from our customer. We now spend circa €300 million in R&D of which almost half just to support our digital-transformation factory. And the rest in the delivery capabilities of our division, notably [indiscernible]. It allows us to file more than 100 new critical patents per year on top of our 5,000 patents that we already own.

In addition, of this powerful technological engine, we expand our R&D with the main technological breakthrough, thanks to an extensive and advanced network of partners in the industries such as Siemens and the French Atomic Energy Commission; with technological leaders, such as Dell EMC and Intel. And with some of the top universities and public-resource institutions in the world. All in all, we have access to huge R&D program of several billion a year, allowing us to prepare our future with [indiscernible]. Next, moving to next slide. All this investment in R&D would be useless, without the proper teams to deliver it to our client.

At Atos, we can count on the quality and dedication of our 100,000 digital technologists to strengthen our leadership in digital transformation. In a continuous improvement of this quality we developed a very strong leadership program. This is very important for Atos. First, a few figures to illustrate this major effort. In 2019 we will deliver 2.5 million training hours to our employee, doubling this number compared to last year, which was already doubled over the previous plan.

This result is a strong increase in the number of certificated employees in digital competencies that we can bring to our client. Obviously, the digital certification are especially dedicated to the [four frame] of our digital-transformation factory. This is, again, a major program of Atos. Moving to the next slide. For 2017 we can count on the now Tier 1 technological profile of Atos, on its very solid balance sheet.

And on, of course, the quality and dedication of our 100,000 employees to expand our leadership in digital transformation and to deliver stronger financials. Indeed, in 2017, which is, as you know, the first year of our new three-years plan, we keep our three financial indicators in the guidance. And we target to grow our revenue by circa plus 6% at constant exchange rate with more than 2% organically. To increase our operating margin range between 9.5% and 10% of our revenue. And, finally, we expect to convert between 55% to 58% of our operating margin into free cash flow.

I now give the floor to Patrick who will comment for our commercial activity. Patrick, the floor is yours.

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

I will start my presentation with the key commercial figures of the year. The total Group order entries reached 13 billion in 2016 with a plus 16% growth rate year-on-year. And it represents a book to bill ratio of 111% for the entire year and 119% in the fourth quarter. In line with positive evolution of Atos commercial activity, the full backlog at the end of December 2016 amounted 21.4 billion, representing 1.8 year of revenue. And the full qualified pipeline was 6.5 billion at the end of 2016, representing 6.4 months of revenue.

Moving to the next slide, after the necessary transformation of our operations, followed by the period of commercial reorganization, we performed a more significant organic growth as we have reached plus 1.8% this year and 1.9% in Q4 2016. We have already entered into the phase two of positive organic growth that will enable us to reach 2% to 3% organic growth, during the period 2017, 2019. I will explain in the following slides how we have built a resilient sales model with the necessary levers to accelerate our organic growth in a sustainable manner. On the next slide in 2016 the revenue grew in all Group vertical markets. First manufacturing, retail and transportation was the largest market segment of the Group, 35% of the total revenue.

The revenue grew 0.6% compared to 2015 to [4.058 billion] in 2016. In this sector the Group developed pioneering offering in the industries for the [indiscernible] manufacturing, digital payments, and customer experience in retail and transportation. Second, the public and health, was the second market of the Group at 28% with a total revenue of 3.3 billion, up plus 3.8% organically. A specific focus was made in 2016 to build new offerings in digital transformation, more particularly on cities a centric or central government, smart cities and education and patient centricity for healthcare. Growth mainly came from the defense area in France and North America.

Public and health was particularly strong in Big Data and cyber security and infrastructure and data management, thanks to contract signatures with new logos. Third market, telecom, media and utilities, represented 20% of the Group revenue and reached 2.352 billion and increased by 2.1%. Atos built new offering focused on network-infrastructure transformation, digital media, and smart grid in utility. Most of the geographies generated growth in this market. Finally financial services represented 17% of the total Group revenue at 1.978 billion, plus 0.4% organically compared to 2015.

In the area of the digital transformation the Group strongly focused on real-time, customer-centric business engagement, digital payment transformation and FinTech for banking. Moving to the next slide, I would like to explain on this slide why we are perceived by our customers as the ideal partner to help them manage the digital transformation of their business. Our strong expertise in infrastructure and data management is a foundation of any sustainable digital transformation. From this point, we can then migrate the application to the Cloud and ensure their maintenance in a very cost-effective manner. To manage the increased number of data we have developed specific appliances such as bullion, derived from the high-performance computer technology, essential to power those Cloud-based application.

Moving from data analytics to cognitive computing and artificial intelligence enabled a move from analysis of the past, to predicting future behaviors, and optimized business and operation. This transformation requires more communication collaboration provided by unified services and especially such as the new-generation WebRTC platform. Cybersecurity is an essential element of this digital transformation to ensure the protection of the data of our customer. All those elements are the constituent of the Atos digital-transformation factory that provides end-to-end solution to our customer. And the fact that we master all the key technologies of the digital-transformation chain gives our customers the confidence that we can be their long-term partner in this journey.

On the next Slide, you can see the elements of the phase two of organic growth. The expansion of the account plan as a contract to cover 80% of our external revenue, this will ensure a full alignment of all the Company resources, to deliver our promise. Extended focus of our customer-satisfaction monitoring by targeting a higher Net Promoter Score on a wider base of client. Continuous efforts on training, re-skilling of our sales force, plus introductions of sales force as a real-time sales-management tool to increase further our sales efficiency. All our key clients will have an executive sponsor to further support those efforts.

I will now comment on some recent wins with our digital-transformation factory to illustrate my presentation. I will comment on four cases. And on this Slide the first case in North America relates to a major chemical group. The client was undergoing a complex business-IT separation project and outsourcing for the first time. In addition, he was thinking to move to the Cloud, and introduce new business model.

The Atos solution reduced cost versus internal base by approximately 23% while demonstrating the ability to improve client satisfaction and scalability. Part of the savings will finance the introduction of the new business model. The second case is related to SAP-HANA and bullion. It related to a global industry conglomerate who Atos, already a client of Atos. Atos and this customer have established a long-term strategic partnership on various IT elements.

We have signed a three-years contract to further develop and expand the global SAP harmonization program, including HANA transition on the platform layer. And S/4HANA, the Cloud, ERP and finance applications, to provide more real-time data and faster decision-making. The third case is about Codex. It's with a large European utility [four] operator, one of the largest utility in Europe, which focuses on being a trusted energy-planning partner to the local authority. This customer collect huge amount of grid measures but this data was used only for internal purpose.

Local authorities are at the center of European energy transitions. However, they have difficulties in empowering their own citizens in their project. Many cities in Europe have 100% renewable-energy sources that are, where, that are strongly invested in decentralized organization. However, electricity demands from citizen do not match with the instantaneous local production. Our client wanted to demonstrate that the grid expertise of its own clients by creating a mobile app for citizen.

Now inhabitants from two pilot cities know in real time and for upcoming 12 hours what they can consume from green and local electricity. Building the solution with Codex required leveraging real-time data from various systems; understand and include the business needs of two completely different stakeholders. Finally, the fourth and final example, is about Cloud orchestration and digital workplace. Our customer, University College of London Hospitals Foundation Trust, UCLH, had a global issue of broadening his client base within the health services. The key challenges were a high patient-care quality and an excellent education and world-class research with leveraging UCLH to digital users.

Atos will deliver a digital end-to-end solution including user-centric approach, digital-workplace services with enhanced of unified communication and collaboration, application transformation and management, private Cloud development and Cloud orchestration and a very specific security solution. Atos key success factor were a proven return on the experience on each of those building blocks. And, mainly, the ability to deliver a unique governance and commitment on global digital-value chain. This end-to-end digital-transformation solution is an illustration of Atos digital-transformation factory leverage. Just to mention that we have also been selected by a world-class public institution to implement and manage cyber security solutions in a six years agreement to provide to that prestigious client a real time cyber defense.

Those examples are just a small sample of the recent wins of the type of project we have in the pipeline to ensure our phase two of profitable organic growth. Elie, now the floor is yours.

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

I'm going now to cover in more detail the operational and financial performance in 2016. And provide you some details on the way we will reach our financial objectives in 2017. Let's start with the reconciliation between statutory and organic figures for both revenue and operating margin. Exchange rate negatively impacted by minus 299 million the statutory revenue at €11.7 billion. This mainly came from the British pound, minus 11% year on year, while the U.S.

dollar did not have any impact on a full year basis. Scope effect amounted to 1.128 billion. This was mainly related to the positive contribution of Xerox ITO for 553 million, Unify for 534 million, Equens, Paysquare and Komercni Banka Smartpay for 78 million and, finally, Anthelio for 43 million. With regard to operating margin, net scope effect amounted to 73 million. And exchange rate effects accounted for minus 31 million, again, mainly from the British pound.

Next slide presents the performance by division. I'm going to comment in the next four slides each of them, but, in a nutshell. On revenue, all divisions contributed to the organic growth. Infrastructure and data management slightly accelerated its growth, which is particularly satisfactory, if we compare to our competitors in that field. Business and platform solutions confirmed its recovery and its new positive trend.

Big Data and cyber security confirm its role of growth engine for the Group. And Worldline showed a healthy growth throughout the year. On operating margin, we had two divisions with higher rate, Big Data and cyber security and Worldline, at respectively 17% and close to 16%. Business and platform solutions had slightly improved its performance by 20 basis points at constant scope and exchange rates and by 40 basis points excluding pension one off effect. The largest improvement came from infrastructure and data management with 190 basis point.

In total, profitability was improved by 110 basis point, to reach 9.4%. And even by 140 basis point, excluding pensions one off effect, which amounted to 41 million in 2016; roughly half of 2015. Next, focused on infrastructure and data management. Revenue in 2016 reached 6.595 billion, up plus 16.6% year on year, and plus 0.9% organically. The division continued successfully the transformation of classic infrastructure to Cloud based environment.

Revenue significantly increased in transition and transformation services, as well as new services such as Cloud orchestration. These additional services, together with volume increases and market share gains, more than offset unit price decreases from hybrid Cloud transformation. North America was fueled by growth in large contract, such as Ismay and Microsoft in telecom, media and utilities, combined with new business signed with the Texas Department of Information Resources, as well as new volumes and pricing mix with the Californian county. Germany benefited from the ramp-up of large new contracts, such as Rheinmetall and BASF, as well as Unify services with various local administration. In other business units, growth registered in Asia and South America, thanks to new contracts ramp-up, partly offset the negative performance of Central and Eastern Europe due to some large-equipment deliveries recorded in the prior year in the public sector in Slovakia.

In the UK, ramp-up in new contract and additional volumes with existing clients did not fully compensate for the base effect in the first half of 2015, related to outstanding sales in high, and high volumes with NS&I and VBT. Finally, France almost achieved to stabilize its revenue, while Benelux and the Nordics was still facing difficulties, notably in financial services. Operating margin was €682.9 million in 2016, representing 10.4% of revenue, an improvement by 190 basis points compared to 2015 on a like-for-like basis. This performance was fueled by the migration of several customers' infrastructure into the Cloud, generating a significant unit-cost decrease, combined with efficiency gains through industrialization, transformation, and automation program. The recovery in Unify business resulting from a large restructuring program contributed to the strong increase of the operating-margin improvement of the division.

By geography, North America, Germany, France, the United Kingdom and Central and Eastern Europe profitability increased either in line with revenue performance or even above, through a tight monitoring of cost, including Tier 1 program action. This program embed synergies from integration, workforce-management action, continued off-shoring wherever relevant, as well as procurement savings. Next slide regard business and platform solutions where revenue reached €3.194 billion, up plus 0.8%, at constant scope and exchange rate. Germany highly contributed to the growth thanks to new contracts won with Telefonica, O2 and Vodafone, combined with incremental services at BMW and Airbus. France also benefited from additional project and volumes with French banks and car manufacturers.

In the other business units, growth was generated by new project in Switzerland, new signatures in Italy, and volumes ramp-up with new clients in South America. This business increase did not completely offset the base effect of one large contract in Turkey in 2015. North America's revenue basis was impacted by some contracts delivered in 2015, such as Toronto Pan American Games, Schlumberger, and Daimler. To a lesser extent, this was also the case in the United Kingdom and Ireland, and in the Benelux and the Nordics. Those two geographies managed to mitigate this base effect by new contracts signed and delivered during the year with customers such as Metropolitan Police in the United Kingdom and in the telco sector in the Netherlands.

Operating margin was €206.1 million, represented, representing 6.5% of the revenue. The improvement of 20 basis point compared to last year at constant scope and exchange rate, and plus 40 basis point excluding pensions one-off effect, came from workforce-management improvement in nearly all mature geographies and business recovery through additional volumes in Germany as well as in France. Conversely, Central and Eastern Europe was affected by the comparison basis I already mentioned. Last, but not least, the first step of profitability turnaround of the division was achieved while investing in innovation and new offerings to enhance the planned B&PS operating margin catch-up. As I'm talking about the catch-up of B&PS let me lay out, on the next slide, the main actions we have put in place for application services with Charles, Ursula Morgenstern, the Global Head of B&PS, and her renewed team.

Number one, all the sales force has been reorganized around the sale of our four key pillars of the digital-transformation factory, which means for B&PS Cloudification of applications, SAP-HANA transformation, digital-workplace customer-[experience] enhancement and, of course, Atos Codex. Sales forces also focus on vertical solutions and transversal projects around automation and robotic. Number two, a complete re-engineering of the delivery model. In terms of organization, going from a scattered team around the world to a global-power approach, that we have implemented, Charles, for long in infrastructure and data management and which has proven efficiency and result. Same in terms of processes and tools where we are in a process of homogenization.

In terms of financial controlling, my teams are now focused on the billable versus non-billable headcount, and not only on the margin on project, which leaves aside part of the non-productivity. In terms of resource management, for which we have recruited a very experienced head of resource management in India in charge of proactive and fluid phasing, as well as training on B&PS contract. This results into five categories of saving; targeted off-shoring, right-sizing, meaning productivity per head offshore has to be the same as onshore, automation and robotization full speed wherever possible; overhead reduction, as everywhere, and de-layering to save cost but also to simplify workflow. All this is up and running and is already supporting the improvement of B&PS for 2017. On the next slide, revenue in Big Data and cybersecurity was €666 million in 2016, up plus 12.8% organically, compared to 2015.

The performance recorded was strong in almost all geographies and all markets. This performance confirms the successful roll-out of these technologies over the last two years to Atos customers, expanding the scope of the division, both in terms of market, and in terms of geography. Revenue growth was driven by France with high-performance computing sales and high volume of development projects for cybersecurity. But the BDS activity was also pooled in the UK, in Germany, as well as in the US by HBC and cybersecurity services. Operating margin was 111.9 million, representing 16.8% of the revenue.

The division managed to maintain a high level of margin, while growing fast, thanks to continuous cost optimization. The division continued to invest in research and development, in order to remain state of the art in several activities, such as identity and access management, encryption and security operating centers, and to accelerate this leadership through innovative offerings, in order to satisfy an increasing demand from large customers. Let's now turn to Worldline on the next slide. Worldline's contribution to the Group's revenue in 2016 was 1,261 million, growing organically by 45.4 million, or plus 3.7%. Merchant services and terminals grew by plus 7.4%, thanks to a double-digit growth in commercial acquiring in Benelux and also in India and central Europe, and to the dynamics of payment terminals.

Revenue in financial processing and software licensing grew by plus 4.8%, driven by more transaction volumes and customer projects. Lastly, revenue in mobility and e-transactional services declined by minus 2.3%, while revenue was impacted by the termination of two historical contracts, the business then managed to successfully sell its offering in e-ticketing, in contacting connectivity solutions and in services with government. Operating margin was 196.9 million, up 130 basis points. This improvement was recorded mainly in the merchant services and terminals business line, thanks to growing volumes and favorable pricing mix, mainly in Belgium, as well as a margin improvement in the UK on private label card contracts. Increasing volumes in card processing supported the operating margin in financial processing and software licensing, while the business side continued to invest in security and fast mature.

Mobility and e-transactional services new business, almost offsetting the two terminated contracts was generated with a lower operating margin. The next slide presents the new evolution by geography. While revenue increased by plus 1.8%, the Group improved globally its operating margin rate by 110 basis points in 2016, plus 140 basis points excluding pension schemes optimization one-off. In 2016, Germany, North America, Worldline, France and other business units contributed to the Group revenue organic growth. North America was up plus 4.5%, Michel-Alain, benefiting from a solid trend maintained all over the year, notably with the new sales dynamic in migration to orchestrated hybrid cloud.

Germany confirmed its recovery with plus 5.3% organic growth, turning back to a healthy organic growth in all divisions, notably thanks to new major deals won in infrastructure and data management, and strong actions undertaken in business and platform solution by the new management. UK and Ireland was almost stable. The plus 4.5% high growth during the second half of the year offset the first half base effect, thanks to a strong activity in the public sector with contract ramp-ups and increased volumes and projects. France reached a solid plus 2.3% growth rate, largely fueled by the strong demand in big data in cybersecurity solutions, and also with the increase of activities in business and platform solutions. Benelux and the Nordics.

In Benelux and the Nordics 2016 was impacted by the ramp-down of contracts, mainly in financial services. The new management team appointed in summer is actively focused on the business unit recovery in order to return back to growth. Other business units also positively contributed to the Group revenue growth, thanks to a good performance in Asia Pacific, Middle East and Africa, and South America. Worldline continued to contribute to the Group organic growth with plus 3.7% over the period, as I already described. Global structures costs as a percentage of revenue increased by 20 basis points, compared to 2015 at constant scope and exchange rates, mostly due to pension plan optimization booked in H1 2015.

In 2016 the Group operating margin benefited from the full effect of cost synergies on acquired businesses. The margin improvement was particularly visible in the main business units, such as Germany, North America, the United Kingdom, France and Worldline. On the next Slide, you can see the effect of the large restructuring and rationalization plan that we performed on Unify. I'm talking here about all Unify, both services and software and platform. As part of the 1,100 staff decrease, total expenses were down by €135 million year-on-year.

The strong action on IT costs, real estate, and other non-personnel costs, especially purchasing, also strongly decreased by €70 million. This allowed Unify S&P to generate €12 million net income, in line with the €10 million expected. The full effect of the savings made in 2016 will materialize in 2017, together with the remaining actions in process. All in all, this comfort, the €100 million EBITDA targeted in 2017, and is clearly supporting the valuation of Unify S&P. On the next Slide, total headcount was 100,000 at the end of 2016, compared to 91,000 at the end of 2015.

The increase of plus 9.6% of the Group workforce was mainly due to the 5,200 staff from Unify, 1,200 joining Worldline from Equens, Paysquare and KB Smartpay, and finally, 1,700 from Anthelio. 2016 the Group hired more than 17,000 staff, mostly in infrastructure and data management. The hiring were mostly performed in the offshore countries, mainly in India, but also in the US and in the UK. Attrition was 12% at Group level, of which 19% in offshore countries. Those figures did not really change for several quarters.

Finally, the number of direct employees, representing 93% of the Group headcount at the end of 2016. Let's now move to the full P&L. I already commented revenue and margin. Cost for staff reorganization, rationalization and integration amounted to 167 million, compared to 190 million in 2015, materializing the actions initiated in the second half of 2015, to significantly decrease the level of restructuring. The amortization of the equity-based compensation plans amounted to 50 million, compared to 33 million 2015, in line with the Group expansion and the stock price increase.

The amortization of purchase price allocation for acquisitions was €96 million, in line with the additional acquisition of the year. The €22 million profit in the line, others, included the gain on the sale of the share in Visa Europe to Visa Inc, for 51 million. Net financial result was a charge of 49 million, including the usual cost of pensions and the interest of the straight bond issued in mid-2015. The total tax charge amounted to 145 million, representing an effective tax rate of 19.0%, showing a new decrease by 120 basis points, thanks, in particular, to the actualization of the massive tax losses carried forward now owned by the Group. As a result, net income was 620 million, plus 42% compared to 437 million in 2015.

Non controlling interests, mainly coming from Worldline, amounted to 53 million. Therefore, the net income Group share reached 567 million, increasing by plus 40% compared to 2015. To conclude with the net income on the next slide, since 2014 we managed to more than double the net income, even excluding the sale of the Visa share. The basic EPS Group share was €5.47, plus 36% compared to 2015, and the diluted earnings per share Group share was €5.44, plus 37%, compared to 2015. I will now comment the cash flow figures on the next slide.

OMDA was 1,375 million, compared to €1.2 billion in 2015. Cash out for reorganization, rationalization and integration was 149 million, compared to 238 million in 2015, fully in line with the 150 million targeted in 2016. Capital expenditures totaled 421 million, representing 3.6% of the revenue, compared to 441 million in 2015. The Group continued to invest in 2016, especially in its payment platforms within Worldline and in its infrastructure business, while rationalizing and mutualizing these expenses, thanks, in particular, to the cloud infrastructure. The working capital requirement increased by 38 million, due to a growing activity in particular in the public sector.

It decreased by 49 million in H1, 2015, mainly thanks to the optimization of this working capital. Cash out for financial cost was minus 18 million at the level of 2015 and tax paid was 129 million, in line with the continuous reduction of the effective tax rate over the last few years. Finally, the other items totaled 40 million, compared to 54 million in 2015. The decrease of the cash out came from the re-skilling in 2015, partly compensated by the settlement in H1 in Germany of an old litigation. As a result, the Group figure shows total 579 million, an increase plus 47% compared to 393 million, like for like, in 2015.

The operating margin conversion into cash jumped from 43% in 2015 to 52.5% in 2016. As a reminder, and as discussed with you many times in the last year, cash conversion has now become a key financial indicator for the Group, not only from a communication point of view, but especially, Charles, from an internal, operational and managerial point of view. Turning to the net cash evolution on the next slide, as a reminder that [Indiscernible] net cash position stood at €593 million at the end of 2015. Free cash flow for 2016 was €579 million, as I've just commented. The Group paid €707 million, mainly related to Unify in H1 and to Anthelio and Paysquare in H2.

The exercise of stock options generated an increase in capital by 28 million in 2016, compared to €58 million in 2015. The sale of the Visa share represented €36 million of cash in. The cash out resulting from the dividend paid in cash was €47 million, out of €130 million of dividend paid in total. There was no effect of translation differences in 2016, as we highly and daily managed treasuries throughout the group in the currency context Thierry analyzed earlier. As a result, the group net cash position as of December 31, 2016, was €481 million, compared to €593 million on December 31, 2015.

The next slide shows a simplified presentation of the group balance sheet. Shareholder equity increased by circa €750 million, and all in all, the total assets of the group at the end of December was €13.4 billion, increasing by €2.7 billion. Let me underline a few items. Goodwill increased, due to the unified services, Equens and Paysquare and Anthelio. Net asset and liabilities held for sale relate to Unify software and platforms discontinued operations and amounted to €150 million.

Net pension provision amounted to €1.25 billion, with less than 25% with funding obligation, which is a key feature of our pension. On the next slide, let's see together how we build a bridge for the operating margin improvement from 2016 to 2017. Obviously, all the figures which are shown here are only estimated figures, to provide a sense of quantitative impact. The same applies for the free cash flow on the next slide. So, we start the bridge from 9.4% operating margin in 2016 and 9.2% pro forma at 2017 scope and exchange rate.

First of all, we do not expect pensions one-off in 2017. As you know, while we keep optimizing our pension schemes, should any one-off impact occur, it will come on top of our operating margin guidance. The main drivers for infrastructure and data management are the transition to cloud, the strengthening of industrialization and the rollout of our automation program, which should materialize altogether by 30 basis points improvement. In business and platform solutions, the main profitability drivers leading to plus 25 basis points contribution come from an improving top line, workforce management leading to higher utilization rates, competitiveness from more offshore, and obviously, from the application services industrialization that I already presented. Big data and cybersecurity, while focusing on top line, will contribute by five basis points next year, in this year.

Worldline will also contribute to the margin improvement by 30 basis points, mainly through synergies on Equens. So all-in-all, these lead to the midpoint of the market, 9.5% to 10%, which is our guidance for this year. Lastly, on the next slide, I would like to go through the 2016 to 2017 free cash flow bridge and to summarize the main levers. Starting with €579 million of free cash flow in 2016, the main item is the operating margin increase before tax of circa €90 million and then the replacement, the replacement of pensions effect by cash OM for €40 million. CapEx, net of depreciation, will impact by €30 million.

Restructuring, reorganization and integration costs are to be reduced by €25 million, to reach our objective of 1% of the revenue. Equens integration will impact by €20 million, as I already explained at our last investor day in November last year. Overall, we expect a cash conversion rate between 55% and 58% in 2016, well on the way to 65% in 2019, as per the three-year plan. That means at the midpoint of the guidance we gave you the free cash flow is around 680 million for 2017. Thank you.

And it's now back to you, Thierry.

Thierry Breton: Thank you, Elie. So let's move to the last slide of our presentation this morning, before the Q&A. And I will go, I will start with the bottom of the slide. We expect 2017 perfectly in line with the three-year's plan objective, and in fact, I would like to tell you that even if it may seem a little bit weird for some of you, because of the uncertainties we have in this world, we are very confident for 2017.

And I should tell you that for me, 2017 will be a very good year, hopefully, Charles, better than 2016. Why do I say so? I say so because we worked very carefully in order to focus ourselves on what we have to do. And my job, since I'm chairing this Company, almost nine years now, is to have my people, my colleagues, working only on what they have to do to serve their customer. Not being influenced by external conditions or situation. And it's true that we have many of them today.

But we try to demonstrate to you that in terms of management, we want our people to be focused on their own priority. And because of that, we gave you the objectives that we will have. For me this is always minimum objective, including, of course, our growth. And we say 2%. For me, is this really the minimum that I want to achieve? And I want to achieve much more, because we are in a continuous mode of progress, quarter after quarter.

This being said, what are the key takeaways and priorities of 2016, in order to have a very good 2017? First, we will benefit from, again, this new environment, thanks to our technological, geographic and business mix, which fit perfectly with what we described previously. The rollout of our digital transformation factory, in order to answer the holistic need of large organization in their digital transformation and the industrialization of our successful global quality program, to increase our wallet share. The acceleration of the plan to turnaround business and platform solutions -- very well now implemented, where we ambition to catch up with our peers in revenue, organic growth and profitability, in particular, through the migration to SAP HANA, through application management industrialization, and vertical cognitive solutions with our very powerful Atos Codex. We'll pursue, of course, our acquisition strategy, creating value for our shareholders, with always financial discipline, in order to keep consolidating the IT sector. We have always been clear on our priorities in that field.

First acquisition of Worldline, to gain market share in Europe is the main objective and we will continue to consolidate at our own speed the market. We have many opportunities here. In particular we are working with those opportunities that we created ourselves to buy activities from bank. We are pretty good at it, as we have done for the Equens acquisition. But we have also many other opportunities here, and we do what we know to do.

The U.S. acquisition second, to reinforce our technological skills and to get the critical size in some verticals as we did Michel-Alain, successfully with Anthelio in the healthcare sector. The retail sector, for example, is a good candidate, but we have also other candidate, as we have already very strongly positioned with customers like McDonald or Taco Bell, for example. Third bolt-on acquisition bringing new technologies, creating a competitive advantage to our customers is offering cybersecurity. We speak a lot of cyber security, but we are very strong at it and we see here many opportunities because again, the demand of our customer is booming in this field, as you can imagine.

And fourth, any other acquisition shall creating value as we did in the past, two sizeable [indiscernible]. And here also we know how to do it and we are good. So, just to summarize, we will continue our acquisition policy based on what we do best. Finally, let me give you an update on the disposal process on Unify S&P. And here also, I want to be very clear, as I've always been.

We already received several offers in the past few months, and of course we rejected the one that we consider were not reflecting the right value of this asset for our shareholders. And of course, Elie, you mentioned very clearly that we are very happy with the turnaround which has begun, and we are very confident that we will generate in 2017, 100 million, minimum, Elie 100 million EBITDA. We are already net positive. We are cash positive. So we turn around this business and Charles, we are pretty good at knowing how to do.

And it's true. It's true that for some of the potential buyers, they knew this effort and when it was presented to them, it was not exactly the same quality. Today it's another asset. The Board of Director of Atos was always very confident. We know the right value of this asset.

We will create big value for our shareholder with the asset. Either we find the right partner, accepting the right value either, we give the value for it. So today where do we stand? We have ongoing discussions with potential buyer. But I want to be very clear with you. I want now Elie, and you know that, close, quickly this negotiation, transaction within the next few weeks.

And anyway I said to Elie before the beginning of the summer. So, either with those potential partner they will understand the right value of this asset, and personally I am very confident that they will understand the right value of this asset. Either we will keep the value for us. But again, we'll come back to you within the next few weeks, and Elie no more than a few weeks. And we will tell you where we stand.

But I am optimistic again, that we will generate as promised, huge value for our shareholders with this asset. This ends the presentation, and of course now we open the Q&A session. Thank you all.

Operator: Thank you. [Operator Instructions] We will now take our first question from Laurent Daure of Kepler.

Please go ahead. Your line is open.

Laurent Daure: Yes, thank you. Good morning, gentlemen. I have three questions.

The first is, if we could have a comment regarding the US and during 2017 on the top line, especially in regards with the recent development in the healthcare sector by the Trump administration. The second is on Unify. I understand that you still believe you're going to sell this asset. But it would be interesting to know what would be the EPS impact if you were to consolidate it in 2017, if you were to keep the value for the Company? And finally, regarding the M&A strategy, especially for the US market, I remember you were looking to grow US higher business there and I was wondering if you had some of the potential targets that were delivering offshore, from offshore, the work, and if the recent risk on the border tax or similar things was to delay, potentially, the closing of some deals. Thank you.

Thierry Breton: Thank you, Laurent, for your questions. So I will take Unify. Of course, Michel-Alain will answer on the, on our healthcare strategy, and by the way, Laurent, Michel-Alain was, I remember you were here for the investor day and Michel-Alain said at that time we didn't know what will be the new President of the United States and he said, by the way, I have two good news. Either it's somebody who will continue the Obamacare and it will be great news, either we will have to dis-install whatever we have done and it will be great news. But Michel Alain, I don't want to anticipate on your question here.

On your question on Unify is, Laurent, was if we have to integrate, what will be the impact on EPS, that's right?

Laurent Daure: Yes, because we have the EBITDA estimate. I suspect there's a lot of depreciation below.

Thierry Breton: Sure, it will be, again, I want to be clear and I don't want to have any, to avoid any misunderstanding, we are not here yet, because we are in discussions and I want to be clear on that. But if we decide that it will create more value to keep it, like always, it will be a positive impact, of course. Elie, could you answer a bit? But it will be positive, of course.

Elie Girard: Yes, no, absolutely. So €100 million of EBITDA, that should, would be more precise in that case, but again, we are not in this perfect year. But that would translate probably in circa €50 million more net income. Five, zero.

Thierry Breton: Okay, but again, it's not why we will not do it, because we will take the options which will create the more value for our shareholders, as mentioned.

For the acquisition, part of, in the US, it's true, Michel-Alain, that we are looking at [indiscernible] and it is including SI. It's true, also, I don't want to anticipate too much, but again, timing is everything in business. It's true that a lot of assets that we were contemplating in the past, especially in SI, Michel Alain, honestly, we could say, Michel Alain, that the bottom of them we did not understood exactly the value of this asset. It's true that maybe because of the circumstance that I've described previously in my presentation, we may see a more reasonable value for this asset. We have a strong opportunity, including to integrate people also because of the way we organize with our H1 and L1 Visa that I described.

So maybe we will have opportunity, which will be more acceptable to us and that we could create more value if the price are going to something that we understand that. So the answer is yes. We may look at it, as long as we find asset with a good pricing and we believe that we may see a good pricing coming back again. For the U.S., maybe Michel- Alain, on healthcare?
Michel

Alain Proch: Yes, sure, Thierry. Hello, Laurent.

So just going back quickly on 2016, before extending 2017, on 2016, as Elie told you, we were really fueled. The growth was fueled by cloud transformation, as I've explained, the whole time. We've been able to sell each time to this chemical company, to different other companies in the U.S., the same Atos orchestrated hybrid cloud, and very successfully integrating both legacy private cloud and hybrid cloud, as Thierry mentioned, with [TWS], and now with [Tesure]. So it's a large part of our growth in 2016, as well as the revenue that we have recognized on the separation of Xerox, as in two companies, Xerox and Conduent, and that it's our larger client in the U.S. So in terms of market, we are ideally positioned.

You know that most of our competitors have suffered from energy and utilities and it's not our case. And they have suffered from application management decrease. And as Thierry was telling you, it's very, very small in the U.S., so it's not our case either. So in terms of portfolio, both in terms of technology and in terms of sector, we are ideally placed for 2017. Now, going back to your question on the healthcare market, it's true that the healthcare market is going to be affected by the Trump administration.

As Thierry was telling you, for us Atos seeks an opportunity, because for sure, the Obama care is going to be reformed. So either reform repair, it's too early to say, and I will not go there. But for sure exams are going to change. They need to be recoded, and it will be extra revenue for us. The last thing I want to mention, because I have read in many places, the other potential impact of the Trump administration, which is the H1B, Thierry told you very clearly that we have almost none of them in the U.S., in comparison to our competitor, because it's not our model of development.

We believe, actually, that it's going to be the reverse. It's going to bring us a competitive advantage, as some others will have to make some modification on their structure of course. And the last thing, Laurent, which is important for 2017, again, in the context of the new administration, and maybe you have seen the press release that was yesterday or the day before. We are positioning Atos as a federal player, and this is new, because in the past it was not the case. We have created a company called Atos Defecti.

We have created with Unify, so you really see the technology at work here, an offer for a new generation 911 is going to be the first offer we're going to push through this new company, and obviously, it's a very large market. I don't want to be too long, but we're talking about the several billions of dollars, and obviously, it's the beginning of this offer. As you all know, there's a very large infrastructure program that is launched in the U.S., and we want to capture part of it. Sorry it was a long answer, Laurent. Thank you.

Laurent Daure: Yes. Thank you.

Operator: We will now take our next question from Mohammed Moawalla of Goldman Sachs. Please go ahead, your line is open.

Mohammed Moawalla: Thank you very much.

Thierry, I wonder if you can comment a bit around the shape of the organic growth expected this year? Obviously, we know at Worldline it will, there will be acceleration in the back half of the year, but curious that, will we see the IT services business of Atos, given some of the macro backdrop you laid out, can be broadly even in terms of this growth delivery? Or should we think about any factors that would cause seasonality to be any different? And then secondly, just given your comments around Unify disposal, does that impact your broader plans in terms of other M&A targets, whether priorities for Worldline or for Atos Group, whether it's in the U.S. or elsewhere, in terms of executing on those? Thank you.

Thierry Breton: Thank you for your questions. So it's, for the first one, I tell you that after having implemented, together with Charles, [indiscernible] of progress, of continued progress. Now we want to see it translating into a continuous progress in terms of growth in the company.

Over the past nine quarter, Elie, we were growing quarter after quarter. No, I have no intent that it will change. So it means that we will continue, definitely, on this trend, in 2017. And by the way, I will, you can count on me to do it for the next three years on the plan. But to answer, more precisely to your question, we will continue exactly on the same train.

It seems that I want to minimize any kind of, quote, unquote, management excuse of seasonality. This was in the past. Now it is continuous progress, quarter after quarter. When I say, again, and I say this also for the, for everyone, when it's 2% for me, the expectation next year, it's minimum 2%, of course. So that's for my, the first answer.

So I want to be very clear here. So regarding Unify, I absolutely, I mean, it doesn't take us too much time. We are at the end of the process. Elie, the carveouts have been done. Everything is done and now it is a, quote, unquote, pure asset.

Charles, we are finalizing discussions. At the end we will take our decision, and believe me, I'm a very important shareholder of this company. I will not make any mistake. So either it creates value with the partners we will have, because we are looking for a partner, and we have some good potential buyer. And we will do it because it creates value.

Either we decide to create more value by keeping it, by the way, my Board is, I should tell you, the Board yesterday is really divided. I have some board members inside who would like to integrate because they love the asset, creating a lot of asset, of value. But for me, the most important, again, is to go at the end of this process, very quickly, no destabilization at all, regarding other potential M&A, and we will continue to be active in this field more like we were in the past. Thank you.

Mohammed Moawalla: Great.

Thank you.

Operator: Our next question is from Brice Prunas of Exane BNP. Please go ahead, your line is open.

Brice Prunas: Yes, good morning gentlemen and thanks for taking my questions, three, if I may. The first one is on Benelux and Nordics.

Of course, you've got another challenging performance there in Q4. I would like to understand, when do you see the trough quarter in that region and how do you see 2017 panning out? Second question is on the operating margin for infrastructure and data management. So the operating margin there is very good. So I would like to understand the driver behind this number, since you speak about the benefit associated with the transformation of customer in cloud. So can you come back on that and maybe see, if you see still room from where are now for the next three years? And my last question is more on top line and trying to understand your pipeline, or, of large deals for 2017.

How would you compare it today with what you got last year at the same period, for example? Thank you.

Thierry Breton: Thank you, Brice, for your questions. So Elie wanted to take the first one, but I would, then we will have Charles, you want to speak on the OM, on the IDM? It will be good for you, Elie. And then of course, Patrick will take the third one. But I would like to tell you first that Benelux, Brice, I should tell you that I'm happy to report that was the first time since many months, we had a very good month of January, so finally, we really hope that we are now turning the situation, again, thanks with the new management that we have put in place.

And we're doing, by the way, a very good job. Unify, so Patrick or Charles, you will answer, but believe me, we are today best in class over 10% and it's our intention to continue, to stay at this level. And we have plans and we are confident that we will continue to do it, but they will give you more answer. And for the growth and the pipeline, Patrick will come on, but we have a very solid and interesting deal, with very large deal in it, but he will comment. First, Benelux.

Patrick Adiba: I think you said it all, Thierry. Just.

Thierry Breton: Oh, not all.

Patrick Adiba: Just as a complement, what you saw in the numbers, Brice, in 2016, it's in fact some acceleration of ramp-downs, which were planned. It went a bit faster than expected.

The good news is now it's mostly behind us, and beyond what Thierry said about the very beginning of the month. I can tell you that we are going to post a growth in Benelux and Nordics in Q1, at the end of April. On the second question, which is the infrastructure on data management, a very sharp margin improvement. It is in fact the materialization what we explained, I think, you quite largely, at the time of the investor day, which is our way to manage, and especially in the cloud, our way to manage the conditions, managing to of course give to the customers' unit price decreases. But managing to realize even higher unit cost decreases.

And you put on top of that additional services we managed to sell at quite interesting margins, like cloud orchestration for example, and gain in market share, because we are gaining market share in the cloud. You get this quite important operating margin improvement in 2016.

Thierry Breton: That's really as we say, now automation plays a big role now and cloud orchestration, and we will continue to roll out this offer. But believe me we want to maintain, and we will maintain, our leadership position here. Patrick, for the next?

Patrick Adiba: On the pipeline, so we have a lot of big deals in the pipeline as I explained, thanks mainly due to the detailed transformation factory.

We have a lot of deals, also, with existing clients to digitalize their business. So I would say that in terms of pipeline and opportunities, we have much more big deals but also these offer a different profile, because with more profitability and end-to-end type of solution. So yes, we have a strong pipeline of big deals related to the new offers.

Brice Prunas: And compared to last year at the same period, which was my question?

Patrick Adiba: It is higher than last year in proportion of it. Unidentified

Company Representative: Thank you Patrick.

Thierry Breton: Brice, we see more big deals, to be clear.

Brice Prunas: Thank you.

Operator: Our next question is from Gerardus Vos of Barclays. Please go ahead, your line is open.

Gerardus Vos: Hi, good morning.

A couple of questions. Just first of all on the M&A side, and on the U.S. there. I think in the past you spoke about the desire to increase the application exposure. Has that changed though, with the smaller opportunity to outsource revenues and people to India there? And then secondly, I just want to come back on the cash flow and the kind of working cap.

It looks like you're expecting another kind of modest outflow into 2017. So my question here is, is the working cap now completely I would say, optimized, and we should not expect and return from that? Thanks.

Thierry Breton: Gerardus, Michel-Alain, you will take the first one and I the second one. But for the first one, we continue to look at any opportunities and I want to be clear. But like always, I think this thing that what we try to do in our Company over the past almost 10 years is definitely to buy at the right price.

That's really our point. We have to look at everything. We are a large company now. We will continue to grow; we will continue to make a lot of acquisitions. But we have to be like always, very careful when we make an acquisition, and we have to pay the right price.

And as I mentioned, we look at opportunities in application management over the past few months, or even years. We made some proposals but we never find the right target at the right price for us. That's it. So because of what we see, because of what we described, because of the uncertainties I have explained, we see something which could be more understandable, quote unquote, and creating really value for our shareholders, we'll do it. This is an entry point for you, Michel.

Michel-Alain: Yes, thank you Thierry. So obviously, as Thierry said, we focus on valuation, and so for the time being we haven't found, yet, the perfect application fit. But in the meantime, we are not standing still. At the right price, at the right valuation, yes. We are not standing still.

Obviously, we have invested into Anthelio, you know that, in the vertical sector in which we believe very, very strongly, as I just explained. The other point, which is, it's a small company, but I just want to mention it. I think we showed, Charles, the press release last Friday, if I'm not mistaken. We bought a company called zData last Friday, which is highly specialized in big data suites. So I'm talking about Pivotal Cloud Foundry, I'm talking about Hadoop, I'm talking about Greenplum and Hook.

So it's really these technologies which are cutting edge, into managing big data and data [indiscernible]. So it was very important for us to make this acquisition. It's small, but these are very, very skilled competencies to accelerate the deployment of projects in the US. Thierry?

Thierry Breton: But this, of course, these are small, precise, technological acquisitions that we continue to do, an ongoing business, and for the right [indiscernible]. Elie?

Elie Girard: Hi Gerardus.

So, on your question on the cash conversion, and the working cap. In fact, in the way I did the bridge you saw on the slides, I put no contribution from the working capital between 2016 and 2017, meaning that impacting the 2017 construction of the cash flow I made, which is only a forecast and estimate at this stage, you have another, the same, in fact, minus €38 million working capital contribution in 2017. [Multiple speakers]. Now, this was due, in 2016, to the growth, quite logically, and you know, I didn't want to put any specific assumption in 2017. I think that I'm rather on the safe side on this item.

Gerardus Vos: Okay, so should we expect that, going forward, to show a modest outflow of, say, 20 million to 40 million per annum? Because now your working capital is optimized.

Elie Girard: No, I, you know, I think, again, I think we are still working, you know, I still think that we can work on over dues, and on our DSO and EPO, so I think we can still progress. So maybe we would reduce this amount. Again, I didn't want to put any sophisticated assumption behind that for 2017. I just, like, as a conservative assumption, we conducted this minus 38 million in 2017.

But again, I think that for 2017, and over the plan, that would be more like a maximum cash outflow on the working capital, alright? So it's really on the safe side.

Gerardus Vos: Okay, understood. Thank you.

Thierry Breton: Thank you, Gerardus. Next question?

Operator: The next question comes from Adam Wood of Morgan Stanley.

Please go ahead, your line is open.

Adam Wood: Hi, good morning everybody, and thanks for taking the question. Three from me, please. Just, first of all, on the business and platform solutions. Obviously, that looks like the business area where you've got the most margin upside over the next few years.

There was a small margin expansion in 2016. Could you maybe give us an update on where the transformation plan is there? Is that all underway and on track, and was that margin expansion in 2016 what you expected, with more to come in 2017? Then secondly, on the big data and cyber security business, you've obviously been having very strong growth there and strong margins. The growth slowed a little in Q4, on a tougher base comp. Can you maybe just help us, where you see the growth trending in that business, and how do you trade off growth versus margins in that business over the next couple of years? Finally, just UK. Again, very strong margin improvement in the second half of the year.

Was there anything specific that drove that? Because it was obviously a lot better than the first half. Thank you.

Thierry Breton: Thank you, Adam. So, on the BPS, you are absolutely right. This is definitely one area where we have the biggest potential in terms of improvement of our operating margin, and we have put all the efforts, all the plans here in place.

We change the team, we enhance the team. We have also an important plan in India, which is to create our own Atos University also in India to retrain, as I said, our people. Retraining, as I mentioned again, retraining will be the key story in our industry for the next three years, and we are definitely taking the right actions here, but Elie will give you some more figures, and also comment on milieus where we see the continuous improvement of our growth. Elie. So first for BP.

Elie Girard : Sure. Hi Adam. So, on B&PS, so indeed, 2016 was not satisfactory, and Thierry said it. Now, there is indeed a big upside on B&PS, starting in 2017. You say that from a figures point of view, we count in the bridge, I showed, on the contribution of 25 basis points to the Group operating margin, which means something like 90 basis points to 100 basis points of margin improvement in B&PS operational margin improvement in B&PS in 2017.

That comes mostly from the plan I described earlier, and that Charles and Ursula, of course, are leading with the team to renew the completely renewed team of B&PS, which relies on the first of all on the top line, on the sale of the four key pillars I described, of our digital transformation factory. For the B&PS modules of this factory and for the cost base, on the savings drivers that I describe, which are off shoring wherever it's relevant. Again, we are doing that in a targeted manner. On the automation, automation and robotics, which can be full speed in this area. Rightsizing, which is an important topic, because we need to make sure that our Indian colleagues are more and more productive, clearly, and the productivity per headcount has to be the same as onshore.

That's also an area of progress that we are enhancing. Then, of course, reduction of our overheads it's not specific to this program and de-layering, which is important there because we need to clean up the organization, not only for savings reasons, but also to improve the fluidity of the workflow. So all of these is ongoing, with Ursula's team, and we will update you, of course, regularly on the advancement of this plan, supporting this improvement of close to 100bp of operating margin of B&PS in 2017. So that was for B&PS. Now, on your second question, Adam, on big data and cyber-security, no.

Q4, nothing happened in Q4, Adam. Q3 was 19%, so you had some seasonality between Q3 and Q4, and H2 was above 12%, like H1 was above 12%. The full year was above 12%, and the plan is above 12%. So it's very much in line with what we said, and with the extraordinary dynamics of this service line, this division, since the integration of [indiscernible]. So we are very happy about it.

The margin, while growing more than 12% on the top line, the margin will remain at this very high level. And then your third question, I think, was, yes, what kind of exceptional in operating margin in the UK in H2? Very simple. It's our optimization and the plan amendments we conducted. We implemented on the Sema pension fund in the UK, for an amount of €41 million of one-off effect, as anticipated, which is just half of one-off effect of pensions we had in 2015. As I said, again, I insist very much on this point, which is very important, we will have, in 2017, no pension one-off effects.

Should we have some, because after all, we are continuing the optimizing of pensions, should we have a pension effect in the operating margin, it would come on top.

Thierry Breton: Absolutely, that's important. Our people will not make their result with that. So it will be on top.

Adam Wood: That's excellent, thank you very much.

Thierry Breton: Okay. Thank you. Next question. Thank you, Adam.

Operator: The next question is from Michael Briest of UBS.

Please go ahead, your line is open.

Michael Briest: Thank you, good morning. A couple from me. In terms of the systems integration business, the target in 2013 was to get to about 50% offshore leverage. Has that been achieved, and do you now expect to pretty much cap that, and will that be one of the drivers of the acceleration? Because your mid-term targets assume that this consulting and systems integration business grows at 2% to 3%.

And then I've got another one on infrastructure management.

Thierry Breton: Thank you. Thank you, Michael. Charles, Elie, you take the question of Michael?

Charles Dehelly: Yes. I think, Charles speaking, I think, you know there is, I think, just looking at the offshore rate is a little bit old-fashioned now, because we have new levers to improve our profitability.

First of all, there is, based on our digital transformation factory, that we are growing more and more in agile development, which is local for local business. Second, there is a very strong lever in automatization, which by the way, which even at stake some offshoring, because, the savings generated by robotization has a very short, is an investment advertised as a very short payback, even based on Indian salary. So I think it, we cannot have, as a single indicator anymore, the offshore rate.

Thierry Breton: It is difficult, because the new [indiscernible]

Charles Dehelly: Exactly. Exactly.

It is what I wanted to say, even though, in our plan to significantly improve our operating margin over the next three years, starting in 2017, and, so that's, which means that in fact, we have international contract, in particular for application management, where we will continue to increase our offshoring, and that's a big part of the plan. Second, we have more, we have activity which are local for local, and then we have activities which are related to agile development in particular, along with the Codex activity. Michel, you want to add something?
Michel-

Alain Proch: Yes. Just a quick one to say that in both Charles' and my view, in 2017 and 2018 the most important thing, obviously, offshoring is good. I'm with Thierry on offshoring, but the most important thing is to capture the application migration to cloud.

In BPS, it's one of the key elements, because it is this application migration that will be the catalyst of many of these large cloud migrations of our clients that Patrick was mentioning, because the big deals that Patrick was mentioning, and that's the thing I think that's important, there are no [indiscernible]. Most of them, they are no [indiscernible]. It's just because we are the client, and the client engages on a very large cloud transformation, and we have already all the infrastructure parts which is ready, and the application part, the migration of application is a key element. Maybe more than offshoring in a certain way.

Thierry Breton: Michael, I don't to have any misunderstanding with our answer.

We don't say, of course, at all, we don't say that it's the end of offshoring. We just say that our industry and the world is becoming more complex, that we have to adapt ourselves to this complexity in terms of evolution of technology and evolution of customer needs. Of course, we'll continue to increase our presence in offshore, because we have here very strong competencies, and Philippe Mareine, our global HR who is here, is working heavily in order to be able to find the right people, the right team. Especially in India, we have our own university here. But we have again, like always, it was probably one of the specificity of Atos.

We never wanted to put all of our resources in one country. I always told you that I was very careful to mitigate, and by the way, we did this for geography/currency purposes. We do this now also because of technology evolution.

Michael Briest: Okay.

Thierry Breton: Thank you.

Michael Briest: My follow-up, sorry, is on the IDM business. Very strong margin, I think 12% in H2. I'm assuming the Sema pension helped there, but guidance in November was that you would add 50 basis points to 100 basis points by 2019 to the margin. So should we be assuming you can do 11%, 11.5% in IDM in three years' time?

Elie Girard: Michael, this is Elie. No, we don't change what we said two months, three months ago.

We see how we make it in the end, but it's really, the plan that you saw. The same as we said for B&PS, between 9% and 9.5% at the end of the plan. So we reconfirm all those targets at the end of the plan.

Thierry Breton: Thank you. Maybe two more questions?

Operator: Our next question is from John King of Bank of America.

Please go ahead, your line is open.

John King: Great, thank you for taking the questions. I've got three, please. The first one was around the change towards paying a cash dividend. Thierry, maybe you can comment on why you've decided to do that this year.

Nice to see it, but what about the timing, given the M&A possibilities seem just as great as they were? The second one a quick follow-up on the infrastructure margin improvements. Can you just say whether that business saw more than its fair share if you like, of the restructuring benefits that has helped to push that up, or how do we understand the strong improvement in the margin? And then the third one was just a clarification Elie I think, for the scope effects. I had a bigger contribution for the full year than you've announced and specifically I think with Xerox ITO you stated in the H1 that it was close to €600 million contribution. Obviously today it's 553 million. So can you just clarify that change? Apologies it's kind of probably ancient history now, but what the driver of that scope change was? Thanks.

Thierry Breton: Thank you, John. For the dividend, we had this discussion yesterday in our Board. First how did we calibrate the dividend? You remember that when we launched our previous three-year plan, we said that we will double the net results and EPS over the period. It was our commitment. We did it at that time when we said this.

We were giving an 0.80 dividend when we started our plan. So indeed, we more than doubled the EPS over the period. So we just said it was fair to give back to our shareholders what we realized, doubling the level of EPS. The Board thought it was again, fair to double the dividend regarding where it was when we started the plan. Now the question is, why this year? Again, I don't want to give you an EBIT to do always the same thing every year.

We have to adapt ourselves regarding the condition. The Board decided to propose this to the AGM only in cash. The reason is that well, first last year we did both, and of course it was very attractive for the shareholders who took it, and we were happy for them. But also Elie, when we are roadshowing many of our investors mentioned the fact that doing it any year could create dilution, so why do you do this every year. We thought that as it was a very good deal last year for the shareholders who did in shares, an extremely good deal, we decided that for this year again, to make everyone happy we will do it only in cash, but again, don't take this as this feat will be always the case and we will again, evaluate the situation except that of course, I intend to have an increase of the dividend next year, because we intend to increase the EPS.

Of course, we will continue to follow the evolution of our net result. That was exactly the discussion we had last year, and that was the decision we took. Thank you. Elie.

Elie Girard: Yes.

On the second question, hi John. On the Unify restructuring, its impact on the margin and so on, here indeed it contributed to the IDM margin improvement, because it was integrated into IDM. We don't disclose the number isolated for the CCS Unify within IDM of course, for the good reason that this is all integrated now, and it's in fact difficult to know the right number within the service line. And, I must say, that it was of course completely part of our guidance.

Thierry Breton: To add that it was our strategy to integrate this service, again, from Unify, because we needed it.

It was a strategy, and I'll just remind you that before even to think that we might acquire Unify, we are already in discussion because we wanted, we needed, this piece of business. So it is something that, and believe me, and Patrick knows that, it's a big driver for our growth here. Because again, our customers were willing to have this. So it was again a business decision, not really a financial decision.

Elie Girard: Absolutely.

Number three question is, yes, on the scope effect, Xerox ITO. So there's nothing new here. So as we explained several times, we got price adjustment for the acquisition, Michel-Alain, due to contracts which were terminated prior to the closing of Xerox ITO, and we adjusted the base corresponding to these factors. We got close to €50 million price adjustment for that, so this is all consistent.

John King: But, wasn't, sorry, Elie, wasn't that adjustment already concluded by the time of the H1 results, and just looking at the H1 statement, it's got a 596 million contribution.

Elie Girard: Yes, but those contracts haven't been terminated just in one day. They have continued ramping down. So we corrected from that. Again, consistency with the price adjustment we got.

Thierry Breton: Time is flying.

Michel

Alain Proch: Just to complement, John, it's Michel-Alain. Just to complement what Elie said, it's mostly three contracts which were IDM contracts terminated as Thierry, as Elie said, just before the acquisition. Who actually ramped down because it's a transitioning to [indiscernible], we actually ramped down in more than 12 months. That's the reason of the length of this adjustment. But it will be finished up by May of this year.

But nothing new. Nothing new, John.

Thierry Breton: Okay, the last question maybe, because it's already quarter to 10 here in Paris. Last question.

Operator: Yes, the next question is from Derric Marcon of SG.

Please go ahead, your line is open.

Derric Marcon: Yes, good morning gentlemen. Thank you for taking my question. My question is regarding Unify. Can you help us to understand the momentum of Unify top-line growth that you expect for 2017? Also, maybe a quick update of the revenue breakdown by activity or type of activity for S&P in 2016, that will help us to see how it has evolved compared to the breakdown you showed for 2015 revenue.

My question here is to any qualitative comments from your side on the dynamism of Unify S&P platform will help us to understand what multiple you can get from potential buyers in H1 2017. Thank you.

Thierry Breton: So we again, as I mentioned, I want to be very clear. First, we are very happy with the way we turn around the business, and I should mention that the team did a tremendous job. We put in place a new management, it's doing a fantastic job.

But again, we are in this negotiation here, so I want to be very clear. I will not comment anything during this negotiation. I told you what I had to tell you. The only thing I will say that is that we will close these negotiations within the next few weeks. And, of course, at that time we will give you information, either on the price we get, either on the way we integrate.

But now, in negotiation, I'm sorry but I cannot comment. Thank you all. So that ends this Q&A session. Again, thank you for you being with us. As you see, we are all up and running and excited with 2017, and I will never accept any excuses from my team that we will not achieve our figures.

Thank you all.