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January 4, 2004

Atos Origin to take $277m impairment charge

French IT services provider Atos Origin SA has announced that it will take a goodwill impairment charge relating to acquisitions of 224m euros ($277m).

By CBR Staff Writer

The charge, which had been anticipated but was at the higher end of expectations, relates to the acquisition of KPMG consulting business units in the UK and the Netherlands.

The Paris-based company said that it remained confident that the rationale for the acquisition is justified and sales synergies have been achieved across the group in 2003, but that it had to take the charge according to accounting regulations.

On a more positive note, Atos reiterated its previously given revenue and profitability guidance, and stated that it had seen signs of a recovery in the IT market. Revenue for the 12 months to the end of December 2003 is expected to be slightly lower than in 2002, and it expects its operating margin to come in at 8%. Year-end net debt is expected to be below 350m euros, as it had projected in September. The company said that following a two-year recession, it believed that the IT services market was stabilizing. There are signs of recovery in certain parts of the market, although that recovery is variable and we believe that trading in the first half of 2004 will remain tough in Europe, where the majority of the group’s activities are located.

Atos also said that it would issue preliminary revenue and profitability guidance for 2004 in early January, ahead of its shareholder meeting on January 24, 2004 to approve its $1.47bn acquisition of SchlumbergerSema.

This article is based on material originally produced by ComputerWire.

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