BERNARD BOURIGEAUD, CHAIRMAN & CEO, ATOS ORIGIN: Good morning, everyone, and welcome. Welcome to all of you in the room but also welcome to those who are listening through a conference call and those who are participating by Webcast. For those who are on the telephone, there will be possibility to ask questions later.

I will share this presentation with Eric Guilhou for the financial part and with Philippe Germond for the Transformation Plan.

First of all, I want to start with the highlights of the year 2006, then go into the main topic today, which is Transformation Plan. And I will finish with the outlook for 2007.

So, in 2006 we have achieved revenue at EUR5,397m, which is 1.5% organic growth, as we said in October last year. We have achieved an operating margin at 5% but that's before impact of stock option and saving plan for our employees. That does represent an absolute amount of EUR270m.

In terms of cash and debt, we did well because we finished the year at EUR60m. So we had an underlying decrease of the debt of EUR120m during year 2006 and that is before the acquisition of Banksys and BCC. If I take into account those two acquisitions, the debt as at the end of 2006 is at EUR360m.

The major business highlights are obviously the acquisition of Banksys and BCC in December of 2006. And we announced earlier our strategic intent to grow our payment business and with the acquisition of Banksys and BCC it's a first step to build up the first pan-European company in the payment service business.

Obviously U.K. impacted badly the year 2006 for Atos Origin. First of all, we encountered difficulties in executing and managing contracts in the public sector in the U.K., and that was a major blow into our results during the year.

We also had delays in signing contracts. Instead of signing the contracts in the first part of this year we signed them in the last part of 2006. And in addition our Consulting business, after a record year in 2005, declined and we had during the year 2006 a very low utilization rate at about 51%.

The good news was on the order backlog, where we generated EUR6.8b. Particularly in the second part of the year it's positively impacted by all the contracts we have signed in the U.K., but not only in the U.K. but also in the Netherlands, and small and medium-sized contracts that we've signed in other countries and in particular in France.

In Italy we also suffered. Market conditions deteriorated and we have started a restructuring plan already in the last part of 2006.

And the last event I want to mention is in December the shareholders of New York Stock Exchange and the shareholders of Euronext approved the project of merger between the two. And that's good news for our joint venture Atos Euronext Market Solutions. We will engage negotiations in the second part of the year and this will benefit the whole Group very likely in the year 2008.

During year 2006 we were able to sign a number of significant contracts. In Outsourcing I will mention the large IT infrastructure contract with Department of Constitutional Affairs in the U.K., the very important renewal of NHS Scotland, and it's a long-term contract, and a significant contract in the financial sector with National Farmers Union Mutual.

In Netherlands we signed three outsourcing contracts with ING, Delta and Telegraaf.

In Systems Integration we signed the Government Gateway in the U.K., a very strategic contract because it goes across the Ministries in the U.K. We signed as well a very important project, which is linked to our expertise with the Olympic Games. We are going to manage this year in July the Panamerican Games in Rio.

Business Process Outsourcing. We signed two significant contracts, diagnostic contract center -- diagnostic centers that we're going to put together in the U.K. Those two contracts will start operation and producing revenue in the month of April.

And in China a significant consulting contract with ChemChina. So, all these contracts were good news, particularly in the second part of 2006.

I'm now going to hand over to Eric Guilhou for the financial part. We will have a full release of our yearly result for 2006 on February 28. So now, Eric Guilhou for the more detailed financial results.

ERIC GUILHOU, CFO, ATOS ORIGIN: Good morning, everybody. The revenue of Atos Origin was 1.5% organic growth in the first -- in the year, of which 2.9% revenue growth in the first half and 0.1% in the second half. And, as Bernard said, it's in line with what we said in October.

You must remember that within this growth there is the impact of key wins and key loss contracts, which has been explained several times during the year. Key losses in the U.K. for EUR140m full year base and key wins which was the full year effect of the Atos Euronext Market Solutions. And the net of these two elements were negative in revenue for the year for EUR70m, impacting consequently the organic growth by 1.3%. So, as a consequence of that, the volume growth of the operations in the year was 2.7%.

Excluding the U.K. operations, the growth in the Group was 5.4%. And this year was fully in line with our budget target stated at the beginning of 2006, while suffering from Italy.

As far as the operating margin in concerned, the operating margin amounts to EUR270m, represents 5% of revenue, and this before the equity-based compensations, of which we have a severe impact of the U.K. operations either from the drop of contracts, the key loss, the loss on Systems Integration contracts and the move from the Italian operations, going from profit in 2005 to loss in 2006. And I will explain that later on.

The AMF has declared or stated at the end of December 2006 that they recommend the companies to publish with us to integrate into the operating margin the equity-based compensations. So we have decided to follow the recommendation of the AMF. That's why you have in this slide two lines of operating margin, the operating margin before the equity-based compensation, which was the reference for the guidance of 2006, and the operating margin after the equity based.

You see that the equity-based impact is EUR23m and it includes first the cost of stock options. If you remember, in the annual report we explained since several years that we issue 1.75% of equivalent outstanding shares every year. And the cost -- and the optional value is amortizable three years, which corresponds to the vesting period.

And second, we have launched this year successfully a new saving plan for employees called Sprint, which we presented -- which was issued in December, representing 2% of stock, of which 10.3 is participating to the program and 10% of the staff have subscribed to the project. So cost of the discount for this Sprint program is EUR9m out of the EUR23m.

And so, as a result of that, the operating margin after the equity-based compensation amounts to EUR247m, i.e. 4.6% of operating margin.

Looking now at the performance by geography. So I repeat to you that the growth -- organic growth was 1.5%. The organic growth excluding the key wins and key losses impact in 2006 was 2.7% and the growth excluding U.K. was 5.4%.

You must remember that in the figures that we publish there is the impact in AEMS impacting both revenue in France and in the U.K. And AEMS inflates the revenue in France and deflates the operating margin in France, and on the contrary it deflates the revenue in U.K. and inflates the operating margin in U.K. And this is due to the structure of the invoicing of the whole operations generated for Atos Euronext Market Solutions to Euronext.

As far as Atos Euronext Market Solutions is concerned by itself, its revenue grew by 21% last year including the full-year effect of the new contracts with Euronext and has a double-digit margin.

Looking at France now, so France has a 9% revenue growth and a 6.3% operating margin. If we exclude the impact of Atos Euronext Market Solutions, the revenue grew by 7% and the operating margin was as well at 7%.

As far as the U.K. is concerned, the U.K. declined by 12.6% and a little more than 13% excluding Atos Euronext Market Solutions. And the profit of the U.K. operations excluding Atos Euronext Market Solutions was close to zero. And this was impacted by the drop of key contracts in 2006 and the provisions for Systems Integration contracts that I will explain later on.

Netherlands still continued to generate a good profit margin, very high level, while being -- still continuing to be impacted by a decline of revenue with Philips and KPN. And the revenue growth of the Dutch operations excluding Philips and KPN was for the third year double digit in this country.

Germany and Central Europe continue regularly its revenue improvement and its profit improvement. And Germany, you will see it later in the Transformation Plan, will be the European mainframe hub for the European operations.

Rest of EMEA is impacted by the Italian operations, which declined by 2% in revenue and which declined by EUR25m in profit, going from EUR14m profit in 2005 to minus EUR11m negative operating margin in 2006.

So I want to give you a more detailed highlight about U.K. and Italy after, and after we'll go by service line.

So as far as the U.K. operation is concerned, the four big contracts affected the revenue in U.K. in 2006 by EUR140m. So there were three contracts in Managed Operations which were the contacts with Metropolitan Police, the end of the DWP [CCC] contract, which was a core central contract, fully subcontracted, and a decline in revenue in the [inaudible] Medical with DTI. And this was disclosed to you since a long time. And there was one contract in Consulting which was a run down of a consulting contract with MOD.

Excluding these four contracts' impact, the revenue was stable in the U.K. during the year 2006. So U.K. profitability was impacted by two things. The first one was the negative impact in operating margin of the drop of the four contracts affecting the profitability by around EUR40m, and the cost to complete on difficult governmental systems integration projects for EUR47m.

Consulting operations suffered a lot in the second part of the year by a decrease of utilization rate with a lack of order entry, with a small utilization rate in December at 51%. But this is before taking into account, first, the restructuring engaged in December which will impact relatively the year 2007, and as well before taking into account signatures in the governmental area in the late December days, which allow us now to be, in January, around 60% utilization rate already for the Consulting operations, which is good news.

As far as the goodwill is concerned, we have decided to carry over a complete impairment test which is not fully finalized today and which will be finalized for the final closing of the accounts at the end of February. But we are expecting to do an impairment depreciation between EUR270m and EUR323m on the U.K. goodwill.

This is based on several things. First, it is based on a cautious business plan so as to ensure not to have any further hit in the future. This does not take into account the positive effect of the Transformation Plan because the accounting rules under IFRS does not allow you to take into account the positive effect of engaged Transformation Plan when they're engaged after the impairment.

And second, we have reduced some technical elements in the calculation of the impairment test by reducing the terminal growth and by increasing [ROACE]. If we take into account the change of technical parameters, they have an impact of EUR70m. And if we take into account a virtual effect of the Transformation Plan, this will allow us to reduce the hit by EUR100m. The remaining goodwill will be in the range of 50% of revenue.

As far the action plan is concerned, there has been a lot of things being done in the last quarter. First, Keith Wilman has been appointed as the new CEO. You have sent the release -- the press release in a few weeks ago. And Keith Wilman has a very, very strong experience in the IT sector and was very successful in turning around in high profit the CSC operations in the U.K.

New partners have been recruited to develop sales and a new business profile in the Consulting. The sales teams have been reorganized and we'll start to see first effects of increase professional services revenue in the first part of the year 2007. And we have anticipated a restructuring program and a cost-cutting program in Q4. And we have already engaged 120 staff restructuring in Q4, which will be finalized in the first part of the year and which will be fully provisioned at the end of 2007 -- at the end of Q1 2007.

As far as the execution is concerned, the first two quarters of 2007 will be of course focused to finalize the projects that we have provisioned and which are for all the major contracts settled with the customers and for which we got cash payment in December with the customers. And now we are finishing the execution of these contracts in the first part of the year. We are finishing the restructuring program. And we are engaged in the first part of the year in all the transition and the start-up costs of the new contracts signed, particularly DCA and the NHS diagnostics contract. So we expect from all of that to have a recovery of the profitability in the second part of the year 2007.

Looking at Italy now. So you see that Italy has a decline of revenue of 2% and a decline of profitability of EUR25m between '05 and '07 -- and '06. Out of this EUR25m there is around EUR10m of projects that we have decided to stop because they not profitable enough and that we have provisioned at the end of 2006. There is EUR10m on price impact and EUR5m on cost.

The U.K. -- the Italian operations were highly affected in 2006 by a deterioration of market environment and pricing pressure, and particularly in the business which are general practice areas. So not on the ACP area or in the telecom area, but in the other business area.

We have had a slight decrease in revenue but we need to take into consideration as well that we have a very big customer in Italy, which is Telecom Italia, and there are some few businesses which are transferred from Italy to Brazil. [It has also moved] between Italy and Brazil with Telecom Italia on application management, and moving as well from the time and material operations to three years long-term contract on SLA base.

We have decided to fully impair the goodwill on Italy. We did an impairment depreciation of EUR60m in the first half and we have completed the depreciation at the end of December.

A new CEO has been appointed and Bernard will describe his profile later on. A new organization has been put in place by business units, with sales people and controlling people in each of the business units. We are engaged in reskilling and reprofiling of staff, with a significant recruitment program and training program for about 200 people so as to be -- to have staff being able to satisfy future growth, particularly in the ACP environment.

And we have updated our program for restructuring and we have decided in fact to do 10% staff restructuring, which is nearly double the initial plan that we had in September. This plan is now agreed with the unions. We have started to execute 40% less the Company in the second part of 2006. 40% has been announced in restructuring and left in the beginning of 2007. The remaining, which is about 300 people, will be restructured in Q2 and Q3 2007. And this will allow us as well to restore the profitability in Italy, particularly in the second half of the year.

Looking now by service line. So the Consulting was heavily affected by the U.K. operations. You see that the decline in revenue was minus 8% and excluding U.K. we had a growth of 7.9%. So with strong countries like France, Netherlands and Spain performing both in growth and in operating margin over 10%.

As far as U.K. is concerned, we had 29% revenue decline in Consulting, of which EUR40m came from the MOD run-down contract and EUR15m came from the lower utilization rate in the second half of the year as compared with the start of the year. Nevertheless, the profitability in U.K. in the Consulting was still positive, strongly positive in the first half, negative in the second half. And the restructuring program engaged in December, which will be finalized in the first quarter, plus the signatures of new order entries, which is a good sign of business recovery and motivation of the staff, will help the operations to recover in the part of the year.

As far as the Systems Integration is concerned, we have had 2% organic growth as well our business being affected in this division -- business by the U.K. operations. And we have had 4.3% revenue increase excluding U.K. and 4.5% revenue increase excluding U.K. and Italy. We have a very strong margin in Netherlands, double-digit margin, and we have a not sufficient margin rate in the other countries. That's why the Transformation Plan will allow us to come back to good standards. You must have in mind that excluding the U.K. and Italian operations the operating margin of the revenue operations is around 6%.

As far as the Managed Operations is concerned, we have seen some effects of the revenue growth between the organic growth at 2.6% and excluding U.K. plus 6%, which is a good growth. The U.K. operations declined their revenue by 9% and this is the effect of the four -- of the three major drop of contracts. Excluding this three-contracts drop, the growth of revenue in the U.K. operations were 9%, positive by 9%, thanks to strong efforts of fertilization and there is very limited impact of the new contracts to -- new contracts which have been signed at the end of 2006 and which will mainly benefit in 2007.

The book-to-bill ratio was strong, 129%, particularly benefiting from the signatures in U.K. in the second part of the year. Atos Worldline generated 5% organic growth and represents 14% of the Managed Operations revenue and has a double-digit margin.

Atos Euronext Market Solutions had a strong growth at 21% but did benefit from the Atos Euronext Market Solutions contract extension with a full-year effect. And the Medical BPO business has a slight decline due to the DTI contract renewal but signed two big contracts with NHS diagnostics, which will strongly benefit to a strong growth in 2007.

Looking at the order entry, we can say that in June 2004 we had a full backlog, which represented 1.2 years. And at the end of December 2006 we had a full backlog, which represents now 1.5 years of revenues. So over the last two and a half years we have increased our full backlog, giving us better visibility for the long-term business. And this is thanks to renewals, [inaudible] contract in 2005, NHS Scotland in 2006. Big signatures as well, KarstadtQuelle, DCA, a lot of new contracts with new customers in the Netherlands.

As far as our backlog coverage is concerned, we start the year 2007 with a 54% backlog and with a 17% pipeline, weighted pipeline, which is a good level as compared with the actuals generated in 2006.

Finally, as far as the cash flow in concerned, as Bernard said, we have reduced our debt, excluding the acquisition of Banksys, by EUR120m, making our debt going down from EUR180m to EUR60m at the end of 2006. And we have had a lower than expected cost of acquisitions of Banksys at EUR300m versus EUR325m explained to you at the beginning of December in the conference call.

These reductions have been generated with strong operating cash flow, while cash [out being] EUR65m for restructuring. We have had the benefit of a strong seasonal inflow of working capital. The second half of the year we have had a positive EUR160m of change in working capital. We are still negative for the full year but on a limited amount as compared with the situation that we had at the end of the first half.

And as far as the CapEx is concerned, they amount to EUR206m, slightly higher than the last year because we have started to invest in data center consolidation and in the new contracts signed at the end of 2006 in U.K., which will continue of course in the beginning of 2007.

We must add to that that we have continued to reduce our operating leases that you consider as a debt. They were to -- they amounted to EUR250m at the end of 2004. We reduced them to EUR146m at the end of 2006 -- 5. And we reduced them again to EUR97m at the end of 2006. And we aim to achieve our target of not having more than 1% of revenue in operating leases by the end of 2007.

So we will have in this three-years period completely restructured the operating leases in the Company while having of course a little more CapEx but overall balancing the two items, CapEx and operating lease, having maintained a good control on our CapEx while investing in data centers and while investing in new contracts.

BERNARD BOURIGEAUD: Okay. Thank you, Eric. Now I want to talk about the Transformation Plan. Atos Origin over the past 15 years has grown very fast, from about EUR300m in '91 to EUR5,400m today. And we have done that in most cases through acquisitions, large acquisitions, and/or large outsourcing contracts. And over the years this has probably impaired our ability to grow organically.

And last year we decided mid-year to engage into a study that we have conducted with outside consultants with the participation of many of our managers. About 100 people participated in the whole thing. And we gave ourselves three objectives; build up an organization so that we are able to improve our organic growth capabilities, improve our operational efficiency and at the same time be able to operate as a global company. So you will find in the Transformation Plan all the actions which are taken to satisfy those objectives.

We have put together a new governance. Management Board, no change, there was a Management Board before. But below the Management Board we have created an Executive Committee. And I will talk about the composition of the committee later but this Executive Committee will drive the operational performance of the Group.

And we have also changed our scorecard system for top management. Previously it was probably too much based on operating results. Now we have added sales, top line growth. We have also added net debt and obviously we will measure the results of the Transformation Plan.

First of all, the Management Board. So Management Board has got five members today and we are all here together. So Philippe Germond joined us in December, December 1. He was previously on the Supervisory Board. Philippe is somebody I've known for many years and he was in our Supervisory Board the member who knew the IT and the technology sector well. Philippe spent 15 years at Hewlett-Packard, many years at SFR and Cegetel and several years at Alcatel. So he's got the ideal experience of both the IT service sector and the telecom sector, so he will be a great addition to our team.

Eric Guilhou is managing all the functions of the Group. Dominique Illien is -- so Philippe will be managing Sales & Markets across the Group, so it's the first time that at Management Board level we've got one of the members who is fully responsible for sales across the Group. He will be leading the Transformation Plan as well, and particularly the offshoring initiative. But at the same time all the other Board members are going to participate and will help him drive the Transformation Plan. In addition, Philippe is responsible for Asia Pacific and North America and will also lead the future development of Atos Worldline.

Dominique Illien is managing globally Managed Operations across the Group. And he's responsible for France, Germany, Italy, Spain, EMEA, Italy being part of EMEA, and South America.

Wilbert Kieboom is managing globally Consulting, Systems Integration and Marketing & Communication, as well as having the geographic responsibilities of Benelux and the U.K.

So, in putting together this new organization, we put the emphasis on obviously sales and market. And at the same time we have put under the operational control most of the large country operations under the management of two managers, Wilbert Kieboom and Dominique Illien, who in the past have consistently delivered the results that they've promised.

So that's the Management Board. Then we have created an Executive Committee and this Executive Committee, as I said, will drive the operational efficiency of the Group. This committee will comprise the six managers of the six major countries of the Group, that is Germany, U.K., France, Netherlands, Italy and Spain, will comprise the global service line leaders, as well as global sales and the main functions.

So this committee will create a more direct link, more operational link, between the Management Board and the operations and at the same time will allow the Management Board members to dedicate more time to development projects, to strategy and to high-level commercial activity.

In the past months we have recruited and appointed a number of people, and you will see on this chart that it's both internal and external appointment. The first one is Rob Pols. Okay, so Rob is again somebody that we have known for a long time, with Wilbert Kieboom. He will be the new CEO of the Dutch operation. He'll be joining us at the beginning of March. He was previously with Fujitsu. He has got a great deal of experience in the service business.

Arnaud Ruffat has been appointed CEO of Italy. Arnaud Ruffat is a long-timer with Atos Origin. I think he was even in the Group before me and has done many jobs very well. And it's a great promotion for him to become the CEO of the Italian operation and Italy needs a strong CEO.

In Belgium we have appointed Ludo van den Kerckhove, coming from Electrabel. He was Group CIO of Electrabel. And he will be running and hopefully developing our Belgian operation.

Keith Wilman, as mentioned by Eric, is also a great addition to our Group. He was a top guy at CSC, Computer Science Corporation, in the U.K. He is coming to us with a great deal of experience, which is needed in the U.K.

In France we have done an internal appointment, so Didier Zeitoun is appointed today CEO of our French operations. He was in Consulting before. He managed -- he spent several years at Accenture. He was for Atos Origin the CEO of the Consulting operation, then became CEO of the Systems Integration operation. He knows the service business quite well.

Then Michel-Alain Proch will work with Eric as VP Finance. Again, Michel-Alain came to us and he helped us consolidate the internal audit function. And today he's going to take more operational responsibilities with Eric.

I want to take this opportunity to say that unfortunately Virginia Jeanson is going to leave the Group and she will be replaced by [Jill Audity], who is sitting next to her. Jill, if you -- yes, because I think it's important that people know you. And for those of you who knew, as well, Bertrand Labonde, Bertrand Labonde is going to take new responsibilities. He will become Group Controller and will be no longer involved with most of you, as in the past.

And then Patrick Adiba. Patrick Adiba is a manager who came through the acquisition of Sema. He is managing today major events and the Olympic Games but he has got responsibility for global sales and he will report directly to Philippe Germonde. There again he is an individual with great qualities. And no doubt that all these appointments are strengthening tremendously the managerial capabilities of the Group.

In fact -- well, you'll recognize this slide. It's typically a Consulting slide, devised by consultants, but I'm sure every one of you will understand what it means. In fact we are moving, if I explain in simple terms, from an organization where the geography was -- where we had the main P&L responsibility in the geography to a matrix organization. So now we are going to have strong countries with P&L and strong CEOs, and at the same time a strong service line with P&L. And a number of decisions are being taken at service line level and with the [inputs] to the country.

I'll give you two examples. In Managed Operations the decision to locate data centers and how the data centers operate is a decision of the center, not a decision of the country. In Systems Integration the tooling, the methodology that we are using, is a central decision which is imposed to the country rather than the contrary.

So it's a full matrix that we are going to operate. And with the new management that we have appointed, I repeat, it will give more time to the Management Board members to work on the strategy, to work on the development of new projects and to work on commercial -- high-level commercial activity.

And it starts with Sales & Markets organization. As I said before, for the first time we have one of the Management Board members who is responsible for Sales & Markets across the Group, so that's a strong signal that we are giving to all the organization. We have decided, as well, to invest in markets. And we have named a number of markets in which we are already very active and for each of these markets we will appoint a market manager.

So obviously finance, telecom, manufacturing, utilities, retail, healthcare. Public sector we are not going to have one market manager for the public sector but we are going to make sure with the activities that we have got in France, in the U.K., in Netherlands, that people in the public sector get together so that they can benefit from experience which has been done in a given country, so that we can leverage in particular the great deal of experience that we have got in the U.K.

The market managers. So we are going to appoint market managers who will be full time dedicated to their job, which is new in our Group because previously a number of our market managers were having other responsibilities at the same time, which was not a good thing. Those market managers, they will be responsible for market strategy and development plan and they will work closely, obviously, with the service line. They will help reusing some of the winning solutions across geographies.

I give you an example, it's -- we are known on the French market to manage the speed radar, and that's a very efficient system. And a number of countries are trying to replicate, install the same system, for example in Spain. And because of what we have done in France, we have got a team bidding in Spain at present on the same type of project. And no doubt that this type of project will come in the other countries. And obviously the market managers will have to help cross-border development for clients.

Philippe will have a major role in making sure that we have in every country a consistent sales structure with a sales director high level and an efficient commercial organization. We have sales directors in the major countries today but still work to be done in that respect. At the same time, we want to go for new clients, new logos and also, because in the past we were really concentrating on our very large clients, very large clients obviously we want to continue to love them and serve them but at the same time we need to develop new clients going into mid-size companies.

This has already been started in a number of countries. And I'm pleased to say that, for example, in the Netherlands we have already gained new logos beyond the biggest client. So a greater share of our resources will be dedicated to finding new clients. So there again we are talking about investing in commercial activity to develop organic growth.

At the same time we are creating the Sales University. In the past years, for those of you who are familiar with the technology sector and particularly the IT service sector, IT service companies were not good at training sales people. And a number of the good sales people that we recruited, they came from the hardware sector or the software sector. So we need to train our people. So we are putting together a Sales University to accelerate the training of our commercial people.

Same thing, we have defined more precisely the role of global service lines, so Consulting, Systems Integration and Managed Operations. So they will be responsible for the strategy. They will be -- they will have a full P&L and we want them to invest into research and development and innovation.

If I take our Group today, one part of the Group where we have done that quite well is certainly the Atos Worldline, where we manage both payment business but also e-service business. That's where we are managing the speed radar. That's where we are, as well, managing e-brokerage platform. That's where we are managing the marketplace which -- for serving the charging -- the loading of trucks throughout Europe. Very, very interesting business and that came from research and development that we -- in which we have been active in the past 15 years. So we need to implement the same model in most of our businesses.

Obviously the service line will be responsible for large deal support, as well as the industrialization program and Philippe will talk about it in a minute. They will be responsible for reviewing our portfolio of activities, as well as our partnerships, and they will make sure that we share best practice across the Group.

We also have work to do in the functions. First of all, we are going to centralize -- fully centralize purchasing. The purchasing function was put into operation in Atos Origin not so long ago, about three years ago, and there is still a lot of work to be done. I can give you an example. We are probably buying 15 to 20,000 PCs every year. We need to be more better coordinated in doing that. So there are a number of areas where we believe we can save money and after all we are talking about a purchasing base which is more than EUR2b.

We are, as well, strengthening the controls as far as functions are concerned. We want the functions to go across the Group, so there will be a dual reporting for all the functions. It means that the CEO of a service line or the CEO of a country -- the CFO of a service line or a country will report both to the CEO of the country and to a central complex, to Eric Guilhou.

So, in doing that, we want to make sure that internal controls are tighter and that we have influence in all the costs that we are managing throughout the Company. The same will apply to the HR function.

So we have launched, following the study at the end of 2006, a program that we have called 303, which means three objectives over three years, with seven initiatives. So I repeat, this program will be led and coordinated by Philippe Germond but all the Management Board members, including myself, will obviously deeply participate in this program.

So Philippe will be responsible for sales with Patrick Adiba, who is the head of sales and -- global head of Sales & Markets. The industrialization program will be led by Wilber Kieboom with Claude Aulagnon, who is Chief Operating Officer of Systems Integration in France. That's the biggest unit in Systems Integration in the Group. Offshoring, Philippe Germond himself will deal with offshoring with Hubert Tardieu, who is the head of global Consulting and Systems Integration.

I take this opportunity to say that Philippe Germond and myself we are flying to India tomorrow for a few days.

Dominique Illien will be responsible for global Managed Operations with Francis Delacourt, who is head of global MO. And then Eric Guilhou will lead three projects, talents with human resources, Jean-Pierre Fieux. Jean-Pierre Fieux is our new Group HR. When I say new, he joined last year coming from Schlumberger. Finance, HR and IT, or the support functions, the project will be led by Eric with Michel-Alain Proch. And purchasing will be done by Eric Guilhou and Arthur Fischer, who is the head of purchasing.

All 303 program is covered through about 60 projects and will involve more than 100 people taken across the Group and probably more as the plan is developing. So I am going now to let Philippe explain in more detail this program and I will take the floor again for 2007.

PHILIPPE GERMOND, MEMBER OF MANAGEMENT BOARD, ATOS ORIGIN: Thank you. What I would like to do is come back to more details about the transformation program. [Technical difficulty].

So for those who didn't hear what I was saying, I'm going to come back in more details about the Transformation Plan. I want to insist that it was a bottom-up exercise which involved more than one or two people. And by the way, some of the plans and some of the detailed plans I am going to mention were already in place, and for some of them it's going to be an acceleration of the implementation process.

So we have clearly three objectives, as mentioned before. One is to operate really as a global company. The second one is to improve our operational efficiency. And the third one is to accelerate our organic growth capabilities. It's clear that some of these projects, like operating globally, we'll try to cut down. And this will bring a positive effect on our competitiveness and our capacity to attract more businesses, more activities with our customers and generate more organic growth. On top of that, improving efficiency is going to be covered by support function purchasing.

That project is not just a cost-cutting project. It is clearly a full project, which on one side involves cost decrease but on the other side we are willing to invest in order to develop the top line of our Company.

So we already mentioned a few things on sales, so I would like to start on the industrialization side. It's clear with the industrialization project we'll have, and we are going to speed up, Atos will be further moving from what I could call craftsmanship to output-driven production. That initiative is going to be around seven subjects. One is a testing factory; another one is business requirement, software production line, data mining tool, project management, productivity management, configuration management.

It is very summarized. And by the way, altogether in all the different initiatives we have 60 different projects which are well defined with a timeframe, with objectives, with owners, with KPIs. So clearly what we are going to do in industrialization is to standardize our processes and tools, codify and transfer our best knowledge among the Company and the best practices.

It's clear that when we perform this kind of action we are going to, at the same time, generate more organic growth. Because if we are more efficient through that industrialization we are going to free up time of operating resources we will be able to bill to our customers and it will increase our competitiveness.

Here you have a few examples of what we could cover in this industrial project. I'm not going to detail that but if you take the testing factory, there will be harmonized tools and processes all over different countries. There will be one single set of tools and processes, so clear harmonization of all that.

If we take the software production line, there will be a standardized development environment called development forges with automation that will be the same all over the place within Atos Origin. On data mining tool there will be a use of application cartography to ease bug-finding and get more accurate commercial estimates on application management contracts. So it's a question of providing a better quality to our customers and improving our productivity.

So all these projects are well-defined, as I said before, in place and ready to be implemented step by step over the next three years.

When we talk about industrialization, it leads us automatically to talk about offshoring. Because industrialization is clearly one way, one basic point which helps us to accelerate our offshoring activities.

First I would like to comment on one point; not all countries within Atos Origin are at the same stage in terms of industrialization. Some countries, like the U.S., Netherlands and U.K. are close to finalize their industrialization process. So basically, since they are close to finalizing industrialization process, they are in a good position to really delocalize their factories with a clear split between front office and back office, and also to optimize their global delivery.

The figures you have in brackets for each country is a share of our I -- SI, Systems Integration, activity which is offshored. By example, in the U.S. it's 40%, in Netherlands it's 6%, the U.K. it's 5%. You have some of the countries which are less mature, less advanced in terms of industrialization, like France, Belgium and Germany, so clearly they will have to strengthen industrialization and concentrate activities into factories. It doesn't mean that these countries are not going to move into offshoring. They have clear objectives about offshoring and they will share the same tooling like the Netherlands, the U.K., or the U.S.

And there are two countries which are late in terms of industrialization implementation, and they will have to launch their industrialization based on the best practices of the other countries. It's Spain and Italy which, by the way, have 0% of their activities in Systems Integration which are offshored.

We made another exercise to really understand, or to help us to understand, what can be offshored in our activities and how to speed up the offshoring of Atos Origin. So, what we have marked on that chart is a few things.

First, on one side you have the type of contracts we sign with our customers - custom projects, package projects, custom application management, package application management. And on horizontal you have all the processes we perform to achieve the contract with the customers, starting from business analysis, design, development, test and integration, validation, acceptance, deployment, contract management and project management.

It's clear that all these different processes for the different contracts cannot be all performed offshore. It's clear that when you perform the business analysis you need to be in front of the customers. At the same time, there are some processes, some activities, which can be highly offshored, for example development, test and integration, validation. It may differ from one type of contract with another one, but basically that's what we end up in terms of mapping of what is offshoreable and what is not offshoreable.

It's not just a question of type of contract or of process. There are also strong links, as I said before, between the maturity of the countries in type of industrialization but also the maturity of the customers in the countries to offshore. There are some countries, and basically Spain, where the customers are not asking for offshoring and they don't want, at that stage, offshoring.

And there are also a difference between type of customers. When we address the public sector in the U.K., the public sector is not asking for offshoring. And I could make the same comment in some other countries. So, if we put all that together, we believe that 40% of our Systems Integration activity is offshoreable.

So, what does it mean? As you said before -- as we -- you saw before, with the exception of the U.S., with 40% of their activity being offshored, most of the countries in Europe, if not all, are single digit in terms of percentage of offshoring. So, we have a clear objective to significantly increase the offshoring within the next three years. So, on average we are at about 6% of our Systems Integration activities which are offshored. The objective is to be at 20% in '09, which means that within the next three years we are going to offshore 50% of what is offshoreable, which is a significant move. And this move is purely organic. It's an internal move. At that stage, it's without any acquisition.

We believe that, when we talk about offshore, there are some other ways also to decrease the cost. We can talk about the offshore and we are going to talk about India and some of the locations in Asia. We can talk about nearshore, which provides significant savings while at the same time not being too far away from our customer base and sharing the same languages. I'm thinking, for example, about Morocco for the French customers.

But at the same time for the less mature countries we can have a first step, moving our activities from expensive cities like Madrid or Milan or Rome into less expensive places in their own countries. At the same time, when you move people from one city, like Madrid or Paris, and move them into the regions like Bordeaux, Toulouse or some of the places in Spain, you already decrease your costs by 20%.

So, what we are going to achieve is clearly to have a clear strategy of a mix between near, close, offshore but at the same time keep in mind that 20% of our Systems Integration's resources will be offshored by the end of '09.

Will we achieve that objective? I'm very positive on the idea we are going to achieve that objective, no doubt. We have put in place, I think, the right model to achieve the objective. First, I can tell you that the maturity and awareness of the management internally, it's not just the top management but the middle managers at Atos Origin, on offshoring is extremely high.

We have a new organization model with a service line which is going to really push on increasing fast our offshoring share within Atos. As mentioned on the chart, we have one Management Board member, myself, being in charge of offshoring. We will develop targeted sales efforts to sell offshore to our customers and one of our best key account managers will be in charge of that. At the same time, the management in the country will have part of his incentive scheme objectives in term of offshoring already this year. So, part of their bonus will be based on offshoring. At the same time, we have the rollout of industrialization.

So, we have the right menu to make sure here that we are going to move from 6% of our SI integration activities being offshored to 20%.

Let's make a move on Managed Operations. I said before we are going to move in Managed Operations into one single global factory with one view on how do we deliver Managed Operations. So, we have six different projects - global delivery model, a project on datacenter architecture redesign, mainframe center consolidation, server management optimization, service desk productivity enhancement and offshore execution maximization.

Managed Operations is not going to be viewed country by country but really globally. Just to give you a few examples of what we are going to do. There is a clear roadmap to achieve that global factory. I'm not going to detail that, but first you need to clean up and standardize, consolidate and automatize, to have lean operations and offshore.

First, I can tell you that this roadmap was already well in place. The idea of having a global factory for Managed Operations was already in place a couple of years ago and now we are going to speed up that process.

The second comment I would like to make is that we don't need to wait until going through the cleanup, the consolidation and lean operations to start offshoring. It's a parallel process and it's not sequential, it's parallel. And offshoring does cover also Managed Operations. Therefore, there will be -- on top of the Systems Integration offshoring activities there will be 1,600 employees or FTEs, full-time employees, which are going to be offshored in '09 for Managed Operations.

Here you have a few examples about the different projects we have in Managed Operations to implement a global factory. I'll just give you two examples. We are going to move, in Europe, in one single mainframe center in Essen from nine -- today nine mainframe centers. So, the project is -- will be developed fast and we'll end up with one mainframe center in Essen in Germany.

Regarding the datacenters, we have today 31 datacenters in Europe with twin technology and this provides value to the customers, because it improves the reliability of our services. And clearly, we are going to decrease the number of datacenters to really improve and reduce the cost per square meter and the productivity of the datacenters.

Once we have mentioned Systems Integration and Managed Operations offshoring, this is a map which might be a little bit complex to read, which is basically the locations. And you have clearly a segmentation between close shore locations, for example in France we have significant activities in the regions with lower costs than in Paris. You have offshore activity, like for example in Morocco, but we are also investigating some offshore -- some other offshore locations. One example could be Armenia. And we have also, obviously, offshore activities, mainly in Mumbai, Kuala Lumpur for Managed Operations today and some activities offshore being in Sao Paulo.

We, at the same time, are investigating some other offshore countries, which might be China, which might be Vietnam, where we may have even lower costs than in India and probably lower turnover than the one most of the companies -- SI companies face in India.

The organic Group target for '09 in terms of number of full-time employees being offshore nearshore is going to be 6,100 by '09. And I insist on the fact it is organic. This is before any acquisition.

Let me move to a few other initiatives. The rationalization of support functions. So, clearly, the objective will be for finance to enhance the control of operations with a clear alignment of all the finance functions. On that chart we will empower employees and up-skill employees, and on IT to optimize and harmonize infrastructures.

Clearly, for IT we will merge our different information systems into one single ERP. What we want to have in finance, in HR, in IT, is really to be aligned on the best practices, to be aligned on the benchmark, but not on the benchmark of today but whoever could be the benchmark in two or three years from now.

Part of that initiative will be to put in place shared services. Shared services could cover accounts payable, accounts receivable, general ledger, payroll, travel expenses. So all these different functions are not going to be performed in the future any more country by country, but are going to be centralized to have a full economy of scale and to improve the productivity, and they don't have to be located in a high-cost country. They are going to be located probably nearshore.

Global purchasing, that's an important subject. As mentioned by Bernard, we have the global purchasing entity. We have had that entity for the last three years. But the coverage by that entity of our purchasing is still too low. It's below 50%. And in my mind the first objective is to have that entity and that global centralized purchasing activity covering close to 100%, let's say 95%, of all purchases within the next couple of years.

It's clear. It's obvious. When you centralize your purchasing, you consolidate your purchasing power. So, we can put more pressure on your suppliers. What I would like to see, and we will implement, are some new ways of purchasing and relationship with our suppliers. When we mentioned earlier that we buy 20,000 PCs per year, I think that when we launch a bid on PCs we can use reverse options. I had some experience in the past of having clement results with that little bit brutal approach, but it is efficient.

And at the same time, we need to decrease our supplier base. We have today much too many suppliers. And there is a clear objective to divide by two the number of suppliers within the next couple of years. Clearly, industrialization, standardization will help us to move into that direction.

That initiative will have some quick wins, obviously. And we'll make savings shortly, within the next 12, 18 months, pretty high savings in PC and servers, in travel, in storage, in mid-range servers, in telecom, in recruiting fees, subcontractors, housing and logistics. So, once again on this one we have a clear roadmap of what has to be done and segment by segment the savings we may achieve over the next three years.

Last but not least is HR. Clearly, a company like Atos Origin, part of the value -- a significant part of the value of the Company are the people who are working in the Company. So, we need to attract, we need to develop and we need to retain the best talent. So, once again, on that initiative we have a clear roadmap. I would summarize around three major points.

First, we have put in place all over the Company, and it's not differentiated from one country to another one, a single performance management system. So, we are operating as one company.

Second point, we are going to insist a lot on mobility program. Many of our people stay too much in the same job too long. So, clearly, we want to incentivize the idea of having our people moving from one job, from one geography to another one, from one service line to another one, from sales service line and reverse.

And a program which is going to be around the development of our people. Clearly, on that program the University -- the Atos University on top of the Sales University, is going to be really critical. So, we are going to invest in HR development. It is critical to and it will create significant value.

So, that was clearly a short presentation about the different initiatives. On top of that, and it's going to be presented by Bernard, there will be a strong follow-up process.

I would say that transformation program starts today. We are presenting a program to you today, but clearly it's going to be a lot of work -- hard work but with a lot of new motivation I'm very optimistic about our capacity to deliver. And we are going to, on a monthly basis, weekly basis, track all the improvements we achieve and make sure that all the plans are in line with the roadmap we define initially.

BERNARD BOURIGEAUD: Okay. So, as Philippe was saying, yes, we're going to follow up very closely what's happening through the transformation program. Each project, and there are about 60 different projects, has been allocated to either a Management Board member or an Executive Committee member. We'll have detailed analysis by country, by service line. And we have for each of these projects a very clear action plan and this will be reviewed monthly by the Executive Committee. We had our first meeting of the Executive Committee in January -- mid-January already.

There will be -- obviously, each time we communicate on a quarterly basis we'll update you on what's happening. What's important as well is that the new incentive scheme will take into account the transformation program and will reward specifically the results of the transformation program.

And tonight we will be going to Brussels, where we have a meeting of our top 300 managers that we normally have a meeting with them every quarter, to launch the Transformation Plan.

I want to talk to you now about the impact of this plan. So, on this slide you have the operating margin impact in the year 2009. So, that is in three years' time. So, we believe that out of the transformation program we can gain 1.5 to 2 points on SI, Systems Integration, revenues, that we can gain 1 to 1.5 points on the Managed Operations revenue, 1.5 [sic - see documentation] to 1 point on the non-industrial purchasing and 0.5 on the functions. So the improvement in operating margin over the next three years will be done through the Transformation Plan but will be done as well in improving, restoring operating profitability in countries like the U.K. and Italy.

For 2007 our priorities are as follows. Generate a top-line growth of 8.5%. Obviously, recover of -- recovery of operating margin in both the U.K. and Italy. And there I am confident that we are well underway to do that, particularly with the action that we have taken and with the new management that we have put in place. Overall, I think we have tremendously strengthened our managerial capabilities, as I've explained to you during the presentation.

We will obviously focus the execution of the Transformation Plan. And we're going to continue developing Atos Worldline, so we've done one acquisition in the year 2006. We will continue to pursue opportunities in the payment business because with SEPA coming up it's the right time to do it. And we've still got the will to expand this business further, particularly on the European market and beyond Europe also in Asia.

Atos Euronext Market Solutions. As I told you at the beginning of this presentation, good news because New York and Euronext are going to get together. This will materialize probably in the year 2008. And Medical BPO, we've got to launch those two diagnostic centers in the U.K. and we are keen to develop further, not only in the U.K. but also replicate in other countries what was done in the U.K.

So we are counting on an improvement of operating margin before transformation costs. And I want to tell you that, above all, I want in 2007 to go back to what -- where we were in terms of delivering results. Up until 2005 our track record of delivering results -- deliver what we promised was a good one. In 2006 we failed. So, we don't want to continue like this. So today the plan that we have put together is clearly the will that we have to be back again to a company which is delivering on its promises.

Our ambition and our plan for the next three years is really for 2009 to have doubled our operating margin and that is assuming a cautious top-line growth. Doubling operating margin means, in absolute terms, going over EUR500m in operating margin.

So that's the plan. I think now, with all the members of the Management Board, we are ready for your questions.

BERNARD BOURIGEAUD: Yes, James?

JAMES CLARK, ANALYST, CREDIT SUISSE: Thank you. James Clark, Credit Suisse. My first question is how much did McKenzie charge you for this?

BERNARD BOURIGEAUD: Yes. We are not to name the company which has helped us, okay? So I'm not naming the company, I'm not naming the fees either.

PHILIPPE GERMOND: Maybe I -- just one comment. I'll just come back on what I said before. It was mainly a bottom-up exercise which involved many internal Atos Origin people from headquarters and most of them were from operations in the countries, so it's an Atos Origin job first.

JAMES CLARK: A follow-up question, which is actually a more serious one, is on the implications for your revenue. About 40% of your revenues are from Systems Integration. You've highlighted that you target maybe at least 20% of that to offshore locations. What do you think that means for revenues in the Systems Integration business and a wider context, at the Group level, over the next three years?

BERNARD BOURIGEAUD: Eric, can you answer this question?

ERIC GUILHOU: In 2006 we did 2% revenue growth and 4% excluding the strategic execution that we had, so I think that we had stability on a normalized basis to generate this kind of growth as a minimum. We want to target a little more for the next three years. And on the volume base, because when we speak about revenue being offshored of course there is a [division] impact, we estimate that we need to generate about 3 points volume more than the revenue growth to compensate the offshore.

JAMES CLARK: My last question is on the updated guidance for 2009. I think the guidance that you've given at the outcome of this program, for 2009, does that reconcile with your previous long-term guidance of an 11% OIBDA margin?

ERIC GUILHOU: Yes.

UNIDENTIFIED AUDIENCE MEMBER: I have two questions. The first one, obviously your U.K. business [is not clear]. If you looked at the market now it's a tougher market, so you need to gain share there and you probably need to [inaudible].

And the same question on the offshore basis. You're really late compared for key markets. If the impact will affect 6,000 people, I don't know how many people you want to add but it's probably more [inaudible] shouldn't be more than 200 people each month. So do you plan to accelerate it, knowing that in the U.K. [inaudible] valuation are quite expensive for companies, how would you do that?

BERNARD BOURIGEAUD: Okay. On the U.K., Wilbert, do you want to take this question?

WILBERT KIEBOOM, MEMBER OF MANAGEMENT BOARD, ATOS ORIGIN: Sure. In those various statements that you made with respect to the U.K., the U.K. is actually positioned number 10 in the market at this stage if you look at the overall scheme, which is not very different than what the Netherlands was about five years ago. The Netherlands at the moment is number one. I think the key thing is not the critical size but is the way you expand and build the business overall.

What we have done in the U.K. is pretty much refocused the sales organization to not only go for the big contracts, and let's also take a ranking, what the ranking is doing. In the public sector the Atos Origin organization is by far number one. So it all depends where you are playing in, whether we're looking at Consulting, whether we're looking at SI and MO. So it's not the overall size that counts but it is where are you playing in, what market sector and what service line are you particularly looking at, because if you take Consulting on its own, we're one of the bigger players in the consulting area.

It's more important to bring the various components together. And if you look at the pipeline, the U.K. in the fourth quarter at the end of 2006 closed over EUR1.3b in new contracts and new deals. So it's not something that's blocking the organization.

So, on the selling side, I think that the U.K. is well positioned. Where we are improving in particular in the operation, and that's something that can be done quite rapidly, is operational control. You've heard Eric Guilhou mentioning that there was about EUR47m on project overruns. Now, you don't have to be a phi beta kappa to calculate that if you can avoid the EUR47m overrun in a particular year, that mechanically your results are going to improve the next years to come. And that's exactly what we're going to be doing. Because if you look at operational efficiency, part of it is risk mitigation, part of it is making sure that you do the implementations on your projects more efficiently.

The only reason why in the Netherlands we've been able to maintain double-digit operating margin for the past six years, and every year I get the same question, will you maintain, the answer again is now for the second year, yes, I will maintain, is that we've been able to obtain 15 to 20% efficiency for industrialization. You've seen this chart that Philippe was actually demonstrating. If you can automate certain processes, if you have also the project control at a high level, if you have the right level of offshoring, it is very easy to maintain and increase the margin.

So all those components we're working through with the U.K. The utilization in Consulting is already back up to about 60%, coming from 51% in October -- September, October. So that means that from the Consulting, mechanically during the course of 2007, we'll see the business improving. Several new contracts have been signed. And similarly, in SI we're actually implementing best practices that we have within the Group.

So with respect to the U.K. I do believe that during the course of 2007, going into 2008, you will see improvements in the overall operations.

BERNARD BOURIGEAUD: Okay. Philippe, do you want to take the second question on offshoring?

PHILIPPE GERMOND: Yes. Your point on the 200 a month, it's not exactly 200; it's going to be less. It's ambitious but it's feasible because it has been the case over the last few months. As I mentioned before, clearly we are going to move up to 6,100 employees being nearshore offshored. It's not just India. We know that India is a very competitive market with high attrition rates. We are investigating some other geographies. But we believe, even without moving into other geographies, that we can achieve that move of 5,200 FTEs being in India and 900 being in the offshore countries. And we say it's pure organic. It's without any acquisition.

NEIL STEER, ANALYST, REDBURN PARTNERS: Morning. Neil Steer from Redburn Partners. Your comment about the margin in '07 is that before the EUR40m P&L costs there will be an improvement. Should we take it, therefore, as read that if you include the EUR40m the margins will actually be down in '07 on '06?

BERNARD BOURIGEAUD: Eric?

ERIC GUILHOU: If we take the EUR40m, the operating margin will be slightly improving.

NEIL STEER: Thanks. Could you just -- during the presentation you commented on the Euronext Market Solutions business. I think the comment that you made was that the revenues were up 21% if you include the annualized impact of when the structure of that business changed. If you strip out the timing and the full-year impact of that change of structure, what was the underlying growth of the revenues?

ERIC GUILHOU: So the impact of revenue of Atos Euronext Market Solutions in 2006 was around EUR16m, so it's a little more than 1%.

NEIL STEER: Just one final question. Can you give us the base level, as we stand today, for the offshore and the nearshore capacity that you have within the Group? Obviously you've expressed your target level that you would hope to get to, but what is the base level as we stand today that you're building from?

ERIC GUILHOU: In Systems Integration we have in India 1,200 people and in Managed Services we have 400 people at the end of December 2006. On top of that -- this is in India, and on top of that we have as well for the global delivery centers, as we do for the help desk business, certain people [inaudible] as well as offshore in Kuala Lumpur, in Brazil for the [inaudible] Telecom Italia case, as I mentioned earlier, in Poland. So there are some other places.

LAURENT DAURE, ANALYST, KEPLER: Yes, good morning. It's Laurent Daure from Kepler. I have a couple of questions. I'd like to go back on the EUR47m of overruns you have in the U.K. Are you going to be able to use the staff that were working on the other -- on the new contracts? And what kind of level would you be happy with in '07?

WILBERT KIEBOOM: Can we use the staff with respect to the project overruns that we had in the projects, the answer is yes. We have, as I said, closed a number of new contracts at the last quarter and particularly during the last quarter, and the hit rate was almost 100% on the outstanding contracts that we did have. On top of that, we've taken a restructuring also in the fourth quarter, so I moved out about 120 FTEs to balance out the business model of the organization, 70 in SI, about 50 FTEs in Consulting and that balanced out, I would say, the total capacity.

We are in need and will be growing also during 2007, so roughly we will be recruiting an additional 300, 400 staff, let's say, for meeting the business demands in the new and growing business. And all the other staff, and that's part of the reason the utilization is back up both in Consulting and also in SI, is that we created what we have standard in the Group, a professional services organization, also in the U.K. to effectively deal with overcapacity. At the moment we have temporary, I would say, overcapacity on the bench, which in 2006 was not the case.

So we rebalanced the business model in such a way that in a very flexible fashion we can deal with overcapacity to manage the operating margin and the utilization. And if you look today, and we're talking now in February, as I said, Consulting is back to about 60% and Systems Integration is around the 78% mark, which is good numbers. So if we can maintain that during the rest of the year, mitigate the risk that we had in 2006 by the project overruns, we should be in good shape by the end of 2007.

ERIC GUILHOU: Laurent, just to complete, you have to review your estimation date on a lower start date because the staff had been reduced over the year prior the restructuring. And second, the EUR47m cost to complete that we have put at the end of 2006, part of it is consumed at the end of 2006, part had to be consumed, so using some resources in 2007. What is important is that out of the major contracts that we have had, the major of them are settled with the customers, which means that they are in agreement with the framework of what we have to deliver with them -- to them in 2007. And we have been paid for what we wanted to be paid at the end of 2006. So that's why the capacity for revenue growth is -- will be more in the second half than surely in the first half mechanically.

LAURENT DAURE: Second point, on the EUR40m cost of the reorganization plan that you don't book as exceptional, so can you give us a little bit more information what the exceptionals is not going to be?

ERIC GUILHOU: Okay. So the transformation plan will have, I would say, two major items. The first one will be restructuring, which will be on the line and for which we have put a total amount into the press release. And there are some additional costs that we invest in the year 2007 as well in the next years, as we have mentioned, the costs for 2007, so as to accelerate some of the investment that we want to do. So that will mean that we will recruit people or that we'll take people which are billable people from the business to work on the projects, as we will recruit all the people for satisfying the routine growth.

That means that we will do lots of training exercise, training program, recruitment program or many things like that, that we consider as operational costs and that we will have to cover with the savings after. And the net of the savings being generated in '07 and these costs is negative by EUR40m in '07 and will be positive in '08 and '09.

LAURENT DAURE: Okay. And the last question is I would like to have an overview on two clients, KPN and the next renegotiation, I think it's about in six to 12 months' time. And there's been a lot of talk about Karstadt a few months ago, so if you could update us?

BERNARD BOURIGEAUD: Okay. KPN, Wilbert, you take KPN, Dominique, you take KarstadtQuelle?

WILBERT KIEBOOM: Okay. So, if we look at the KPN situation, KPN has been growing in confidence, particularly through the traditions of the eBase contract and also the contracts in Germany. With respect to the existing contracts in the Netherlands, it's clear that they have different degrees of maturity because during the course of the past years we have been renegotiating already components and SLAs within the various contracts. The [inaudible] service contract, for example, runs for another two or three years. We're looking at renewing the software center contract, which we hope to renew for another three years. And most of the datacenter components have already been renewed in various SLAs that will continue between one to three years.

So it's become an ongoing item whereby the customer contact is very close, just like we had with Philips over the past years, and has been renewed. And as Eric was saying as well, clearly within the TCV, total contract values, contractually we've seen a little bit of a decline but the overall growth that we've been able to generate out of the market, because we grew excluding KPN and Philips 17% in 2006, we have been able to compensate, let's say, the downfall that we see in those two big clients. In that sense, overall in 2006 the Netherlands grew by about 4%.

BERNARD BOURIGEAUD: Karstadt?

DOMINIQUE ILLIEN, MEMBER OF MANAGEMENT BOARD, ATOS ORIGIN: Yes, about the KarstadtQuelle contract, I must remind people that it was signed in 2004. It's a long-term contract until 2012, end of 2012, and it was presenting a total contract value of EUR1.4b, EUR1.5b. It's still a contract until 2012, no doubt. We had several adaptations since the contract started. We give the scope of KarstadtQuelle shares, as they have disposed of some of their activities. For all the activities they've disposed of, like DIBA, which was an insurance company, Karstadt Compact, which was a part of the stores, we've kept on working with the new owners, sometimes with extensions of contracts.

In addition, in 2006 we shared with them our new savings plan in addition to the contract commitment, because through the contract commitment we are delivering savings on a regular basis through work units, etc. We've shared with them new saving plans by which we reduce the number more drastically, we reduce the number of work units as joint savings between KarstadtQuelle and Atos Origin, as it happened in the past with many other customers, one example being Euronext.

At the end of 2006 we have also signed additional parameters within KarstadtQuelle that allow us to be really confident for next year on this account.

ERIC GUILHOU: So the revenue with KarstadtQuelle declined a little but we are still with a revenue which is higher with the minimum guaranteed with the customer.

BERNARD BOURIGEAUD: Are there questions from those who are on the phone?

OPERATOR: Our first question comes from Hardik Doshi. Please go ahead with your question, announcing your company name and location.

HARDIK DOSHI, ANALYST, LEHMAN BROTHERS: Sure, this is [technical difficulty]. Hello, can you hear me?

BERNARD BOURIGEAUD: No, I don't -- no, it will come maybe.

PATRICK STANDAERT, ANALYST, BEAR STEARNS: Hi. It's Patrick Standaert from Bear Stearns. Two quick questions, if I may. Can you give a sense of the payback period for the contracts or the Transformation Plan you're talking about?

And finally, can you give a sense of the extensions in terms of market you have for this plan? If the market price services slow down, do you have to review your assumptions, do you have to accelerate the investments you're talking about or you are still comfortable with the market slowing down a bit in 2008, for example? Thank you.

BERNARD BOURIGEAUD: Okay. Eric, you can take the first question and maybe Dominique and Wilbert can take care of the market question.

ERIC GUILHOU: So as far as the payback of the Transformation Plan is concerned, our target is to have fully self-financed the cost of this plan by mid-2009. In the meantime, in 2007 we will still be free cash flow positive slightly and in '07 -- in '08 we'll continue to increase the free cash flow.

DOMINIQUE ILLIEN: Talking about the market sensitivity of the Transformation Plan, if the market is not going as fast as we -- the analysts can imagine, first, we've taken for the Transformation Plan and the figures we've given to you a very cautious approach for the top-line growth. So it gives us at this level some results, obviously.

The second thing which is very important is that what we see from the customers, and I can tell for the southern part of Europe, France, Germany, Italy, Spain, is that the propensity to spend and to keep on growing in terms of IT services spend is there. The propensity for outsourcing in large contracts is also there, even if in some countries like France and Germany in '06 the growth was mainly due to fertilization for medium-sized contracts. We see now back in the pipeline large-sized contracts, which obviously take time before [inaudible]. So we have long term, when you say '07, '08, '09, a pretty confident vision that the market will keep up at a minimum at the same rate of growth as it had in '06.

WILBERT KIEBOOM: Yes. I think that I can second that, actually, if you look at the Consulting and SI space, Systems Integration space. If you look at most of the analysts' reports that we've been offering, and in particular what we personally notice with the customers and the clients is that you see that there's a lot of new deals also, not only in the Tier 1 cities, the key towns, the larger towns, but also especially appearing in the Tier 2. And in the Tier 2, Atos Origin is especially well geared to address that customer base.

You can see that by the increasing utilization that's happening. You can see that also by the fact that there's coming scarcity already in the IT resources, and particularly in Systems Integration, which is something that we predicted a couple of years ago but it is happening. And the good news about that is that also effectively the tariffs over time will be able to go up again. So instead of being sort of a demand market driven by clients, you see that the suppliers are now getting a little bit more in the balance with supplying the solutions they're offering and also their people.

A lot of large accounts are also now proposing to us how we get a sort of a framework by you guarantee supply of people for the next couple of years if we'd be at a higher tariff. So you see interesting trends already developing. So I would think that from the service line Consulting and SI that, yes, we've taken a cautious revenue projection, the markets will be a strong driver, pricing, if anything, will go up and not go down, so that is good news as well. And overall I think that the plan that has been proposed here is a very realistic plan. That's my personal opinion.

BERNARD BOURIGEAUD: Okay. Can we take now a question from the phone?

OPERATOR: Our first question comes from Hardik Doshi. Please go ahead with your question.

HARDIK DOSHI: Sure, hi. This is Hardik Doshi from Lehman Brothers. I had one clarification and then actually a follow up. The 6,100 headcount target in the offshore/nearshore for 2009, is that just for Managed Operations or is that for the overall Company?

BERNARD BOURIGEAUD: Philippe, can you address?

PHILIPPE GERMOND: The 6,100 FTEs offshore/nearshore are the sum of Systems Integration and Managed Operations.

HARDIK DOSHI: All right.

PHILIPPE GERMOND: And if, once again, I insist on the fact it's pure organic. It's without any acquisitions.

HARDIK DOSHI: Okay. Just looking at your headcount very quickly, 20% of your Systems Integration current headcount would translate to about 5,000 people. So that kind of translates to not much growth in the Managed Operations side and the offshore. Could you just detail that a bit in terms of what the break up would be?

PHILIPPE GERMOND: We don't give the details -- or the breakdown between SI and offshore -- and Managed Operations. Let me put it that way. In the slides, we mentioned that we have 6% of our Systems Integration being offshored today, moving up to 20%. And I also mentioned that, by the way, I gave a figure, it's 1,600 employees in Managed Operations by '09, among the 6,100. So in fact you can have the breakdown.

ERIC GUILHOU: You may have difficulties to reconcile, because we are talking in percentages of direct staff and not, of course, indirect people. All are sales and management.

HARDIK DOSHI: Okay. I did have one quick clarification on the new contracts ramping up in the U.K. When would you expect those to actually be profitable, given that there will be significant costs, at least initially, as you ramp up the new contracts?

BERNARD BOURIGEAUD: Yes, Wilbert, please?

WILBERT KIEBOOM: Yes. As Eric Guilhou already commented, the first half of 2007 we're actually using to pretty much wrap up, let's say, what was there left. And during the course -- the second half effectively of 2007, you will see the improvement clearly kicking in. And particularly in the Consulting space we have closed new contracts with the NHS, MOD that have helped already immediately bringing back the Consulting division to acceptable utilization levels, including also the contract with ChemChina. Those are -- so net sales, I would say that definitely during the second half of 2007 you will see the improvement.

HARDIK DOSHI: All right. Thanks a lot.

WILBERT KIEBOOM: Okay.

OPERATOR: Our next question here comes from [multiple speakers].

YARA YAZBECK, ANALYST, GOLDMAN: Good morning. Yara Yazbeck from Goldman. Just two questions. Can you update us on the opportunities in the [payment services] area? Should we expect any acquisitions this year, is anything happening?

And the second question is on your personnel expense, the remaining part of the restructuring, increasing salaries, hiring. What kind of growth in the personnel expense would you expect in '07?

BERNARD BOURIGEAUD: Okay. On the first question, yes, we want to continue to expand in our payment business and obviously if there are acquisitions opportunity, we will pursue them. I am not going to say more at this stage. When we announced Banksys and BCC, I said it was the first step to building up pan-European capabilities in payment services. There are more opportunities in other countries of Europe, as you know.

Eric, can you take the second part of the question -- second question?

ERIC GUILHOU: As far the personnel expenses are concerned, this is based on a scenario with a leverage, of course, of around 3 to 3.5% salary increases. As there is increasing attrition, there is a lot of new people which are fresh people with a low cost point; we don't have to do salary increase. So the net impact as a Group is really lower than the 3.5%.

BERNARD BOURIGEAUD: Okay. I think we're going to take another question from the phone.

OPERATOR: Our next question comes from Gerardus Vos. Please go ahead with your question.

GERARDUS VOS, ANALYST, CITIGROUP: Hi. Thanks for taking my question. If you look on page 42 of the presentation, where you do the calculation of the expected '09 margin improvement, you get to an improvement between 200 and 300 basis points. I just have two questions on this. First of all, does this include the turnaround of the U.K. and the Italian situation?

And, secondly, how will this kind of kick in over the three years?

BERNARD BOURIGEAUD: Eric, can you take this one?

ERIC GUILHOU: I will need to review the calculation with you, but we are more in the range of the EUR140m to EUR210m of the effects, according to the mix of revenue that we have. So, the first point.

And the second point, in our scenario we expect as well to have the recovery of the U.K. and the Italian operations to participate to the doubling of the operating margin. Once again, I repeat that the savings that we are targeting are savings which are, after all, because of implementation and the running costs that we'll have in the operating margin.

GERARDUS VOS: Okay, thanks.

ERIC GUILHOU: Okay.

GERARDUS VOS: And then maybe a follow up on the corporate costs, if I may. Corporate costs went up a bit in the second half; generally a matrix structure is more expensive than running a regional structure. What do you think the impact is going to be on the overhead cost?

ERIC GUILHOU: Can you repeat your question?

GERARDUS VOS: Generally, to run a matrix structure is more expensive than a regional-based structure. So I was just wondering, would you expect the costs to move up?

ERIC GUILHOU: As far as the corporate cost is concerned, we have some strategic one-off costs in 2006. We'll have part of the EUR40m of transformation which will be in the corporate in 2007. And after we aim to come back to a normal run rate of 1% in 2009 of pure, I would say, pure corporate costs.

GERARDUS VOS: Okay, thanks.

BERNARD BOURIGEAUD: Next question from the phone.

OPERATOR: Our next question comes from James Dawson. Please go ahead with your question.

JAMES DAWSON, ANALYST, MORGAN STANLEY: Hi there. It's James Dawson here from Morgan Stanley. I've got two questions and a clarification. So, in terms of offshore, I was just wondering, you talked about wanting to do this organically. Your numbers and your targets are still quite low, I think, compared to some of the peer group, to have 10% of your people offshore in '09. Are you considering doing -- would you considering doing acquisition or are you basically saying you just want to continue to do organic?

I think the second point on the offshore was there doesn't seem to be anybody from India in the management team. Is there -- can you give me an idea of how -- the experience of the Group in terms of moving to offshore services, where that comes from?

BERNARD BOURIGEAUD: Okay. On the first question, we're not discarding the possibility of acquisition. And we have been looking over the past years at carrying out acquisition in India, but it has proved difficult and very expensive. So we've been extremely cautious. I said at the beginning of the presentation that we are going to India again, so obviously not only to review our own operations but also to have contacts with people. But we'll be extremely cautious, because not only the price of Indian companies is high, but integrating Indian companies is not an easy task at the same time. So we'll be very cautious.

Philippe, do you want to answer the other question?

PHILIPPE GERMOND: In fact, if I understand, your second question is why is it that now you're going to succeed when in the past you did not?

JAMES DAWSON: Yes, I would just like to -- wonder where the kind of experience in executing this offshore [path] comes from within the Group.

PHILIPPE GERMOND: Okay.

JAMES DAWSON: Or is it a risk?

PHILIPPE GERMOND: We have already some experience because we have already some offshore activities, as we mentioned.

BERNARD BOURIGEAUD: And we have a new man, Philippe.

PHILIPPE GERMOND: Yes.

JAMES DAWSON: I've got [some falling out] but where [she lives] --

PHILIPPE GERMOND: As we mentioned, it's really a team work to move into that direction because it's clear that first, as I said before, in every single country where we operate, the management has an objective of showing share. He's going to be measured, and he's going -- bonus is going to be partly based on that.

So I'm not going to come back on the different points, but clearly the level of awareness and motivation around offshoring is much higher that what it was before. [Inaudible] we have a strong management team in India. By the way, as you mentioned, we don't have any Indian or Asian in the Management Board or at the Executive Committee level. Maybe we will have in the future one or more than one.

One of the points I mentioned in the presentation is the fact that we are going to increase the mobility within the Group. And I think it's not just a question of having Indians in the greater management team; it's also to have Indians moving for a few years in Europe to know better the Company and what we are doing with our customers, and to have also European people moving in India to really understand what can offshore do.

As I mentioned before, we have one of our best key account managers who is managing one of our largest customers is going to be now fully focused on selling offshoring and motivating the sales people in Europe to sell offshore solutions to our customers.

JAMES DAWSON: Thanks very much, Philippe. In terms of - this is maybe one for Eric - the EUR270m charge, can you break that down for us in terms of how much of how much that is staff reductions in terms of numbers of people, perhaps, and the amount, how much is maybe from other actions?

ERIC GUILHOU: So, out of this EUR270m, there is EUR40m net cost which will be in the operating margin in 2007 and the remaining will be as exceptional, and it will mainly be staff related cost base.

JAMES DAWSON: And -- okay. In terms of the -- can you give us a level in terms of staff reductions? You say 10% of people in Italy; I guess that's not everything. Can you give us an idea of where, which markets, which geographies and sort of numbers?

ERIC GUILHOU: So, first additional comment, the EUR270m are costs for the Transformation Plan, so they did not integrate a specific plan for the U.K. and for Italy, which are right-sizing of operations than independent, I would say autonomous, from the Transformation Plan.

I will not give you a split by country, because of course it is very sensitive information. What I can say to you is that we [have engaged] a significant part in -- a significant part in 2007. That will take time, because that is a long process to implement and to be effective in -- mainly in cash out in 2008, while the plans of the U.K. and Italy will be mainly in cash out in 2008.

JAMES DAWSON: Does that mean, Eric, that the restructuring charge this year, in '07, won't just be the EUR160m which you've talked about in terms of the transformation capital, but also includes other amounts for other plans?

ERIC GUILHOU: Well, I'll just repeat again one key accounting rule, which is that you can put into your P&L only the cost of restructuring that you have announced to the organization, not those which are not announced. So this EUR270m will be spread over the time, over the three years, mainly in 2007 or in 2008. Of course that benefit of the profit recovery you will not have 100% in the P&L of 2007.

JAMES DAWSON: Yes. But are there any other plans in terms of the P&L charge you've talked about? Okay, maybe we can talk about that one later.

I have one last clarification, actually, Eric, just in terms of the '07 margin rate guidance. You basically said earlier you're looking for a slight improvement in the margin rate, is that right, for this year, including the EUR40m, or are you not much more than EUR40m?

ERIC GUILHOU: No, I said with the improvement of the operating margin in absolute terms before the cost of the Transformation Plan, which will be within the operating margin, and slight increase of the operating margin in absolute terms, after these costs.

JAMES DAWSON: I see. Okay, that's great. Thanks very much.

BERNARD BOURIGEAUD: We'll take a last question now from the phone.

OPERATOR: Our next question comes from [inaudible]. Please go ahead with your question.

UNIDENTIFIED PARTICIPANT: I have no question.

BERNARD BOURIGEAUD: Okay. Well, we take a last question from the floor, then. If there is no question, thank you for having listened to us.

OPERATOR: Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may now disconnect your lines.

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