CGEMY Capgemini SE (PK)

IT services group Atos Origin (ATO.FR) Wednesday kept its full-year targets and confirmed that IT services markets continue to recover steadily, which should lead the group back to revenue growth.

"Activities continue to improve progressively," Deputy Chief Executive Gilles Grapinet said in a conference call with reporters. Grapinet said that he expects the group's revenues to stabilize in the second half of the year and hopefully return to growth in early 2011.

For this year, Atos still expects organic revenue to decline slightly due notably to the bankruptcy of one of its clients, German retailer Arcandor. Organic revenue should however decrease to a lesser extent than in 2009, the group said.

Along with rivals Capgemini (CAP.FR) and U.K.-based Logica PLC (LOG.LN), the company has faced tough market conditions since last year, as big customers delayed investment and purchasing plans amid the financial and economic crisis. But there have been signs of recovery since the start of the year, signalling that the crisis may have been shorter-than expected for the IT services industry.

Atos said its closely-watched book-to-bill ratio was 114% in the first half compared with 112% in the same period last year.

The Paris-based company, which is managing the IT systems for the 2012 Olympic Games in London, also confirmed it still expects to improve its earnings before interest and tax, or EBIT, margin by 50 to 100 basis points this year.

Atos said it is on track with its plan to improve its EBIT margin by at least 250 basis points between 2008 and 2011 and that during the first half it focused on preparing its sales force for a better economic environment.

The group has undergone a series of restructuring measures in the past two years, accelerated by Chief Executive Officer Thierry Breton when he took office at the end of 2008.

EBIT for the six months ended June 30 rose to EUR150.1 million from EUR119 million in the same period last year, above an average EUR134 million forecast by five analysts polled by Dow Jones Newswires. This gave the group an EBIT margin of 6%, an improvement of 110 basis points on the same period last year.

Net profit for the first half rose sharply to EUR60 million from EUR18 million last year while revenue fell to EUR2.49 billion from EUR2.59 billion last year, in line with analysts' forecasts.

On an organic basis, stripping out acquisitions, disposals and currency movements, revenue fell 4.6% "in line with full-year expectations," the group said in a statement.

At 0700GMT, Atos shares were trading up 1.6% at EUR34.09, while the French CAC-40 index was up 0.8%.

-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com

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