In the full year ending December 31, 2006, the company made a loss of 264m euros ($349m) compared to a profit of 235m euros ($310m) in 2005. This was largely due to an impairment charge of 378m euros ($499m) covering goodwill charges at its struggling Italian and UK operations.
Problems with delayed contract signings and tough market conditions at these operations also caused a fall in operating profit margin to 4.6% from 7.3% in the previous year, which is below the identical margins of 5.8% posted by resurgent domestic rival Capgemini SA and UK competitor LogicaCMG Plc last year.
Revenue grew 1.5% at a constant scope and exchange rate to 5.4bn euros ($7.1bn), and contract wins with the likes of the UK Department of Constitutional Affairs and NHS Scotland meant that Atos Origin closed the year an order book of 6.3bn euros ($8.3bn).
The company unveiled its recovery program called the 303 Plan to investors last month, which is aimed at accelerating organic growth, improving efficiency, and developing its use of global resources. The goal is to achieve top-line growth of 8.5% in 2006.
A key part of Atos Origin’s strategy is to be more aggressive in its use of low-cost delivery centers in offshore and near-shore locations. The company has opened a new software development facility in Valladolid, Spain with 120 employees, with plans to expand this to 250 by the end of the year. The center will support clients in the telecoms, automotive, and financial services sectors.
