Acquisition of KPMG Consulting
UK and NL
Bernard Bourigeaud

Strategy• End to end service offerings• Balanced mix of consulting, build and run• Capitalize on industry sector knowledge• Develop a focused consulting practice• Focus on clients• Leverage strong HR management
Build on global presence

2

Turning Client Vision into Results

KPMG Consulting UK & NL

• Highly respected consulting leaders• Revenue in 2002 E : € 600 Million• 2800 staff including 150 partners

3

Turning Client Vision into Results

Agenda• Overview of KPMG Consulting UK & NL
• Acquisition rationale• Financials• Acquisition execution• Conclusion

4

Turning Client Vision into Results

KPMG Consulting UK & NL
Business Consulting

Strengthen European
presence

Market driven
organisation

WC FinancePublic sector
(PS)

SCM
25%

36%

21%

WC HR,
E-learning,
other

5%

13%

17%

NL
€ 200 M30%
UK
€ 400 M

24%
29%
Consumer &industrial
markets (CIM)

CRM

Technology

Strong solution
offerings

Information,communications& entertainment(ICE)

Stronghold in the UK,
and the Netherlands

Financialservices (FS)Deep market
knowledge

Note: All figures based on 2001A revenue, except for solutions mix, based on total headcount5

Turning Client Vision into Results

KPMG Consulting UK
Background

Revenue* (€m)
546

• Organisation along 4 vertical sectors

474
413

390-410320• Large scale investment in technology
capabilities : € 15M in Ebit
• Investing in the development of longterm client relationships

230• Building support processes,
knowledge systems and methodologies
1997

Revenue
growth (%)

1998

39%

Ebit margin**(%)*Based on currency rate : 1£=1,6€**Based on US GAAP

6

1999

29%

2000

2001

2002E

• Investing in repeatable solutions• Radically reshaping the skill base ofpartners and employees (520 staff
restructured in the last 2 years)

15%

15%

(27%)

6.4%

11.4%

9%

• Improvement in utilisation rate as aresult of business focus andrestructuring

Turning Client Vision into Results

KPMG Consulting UK
Professional staff

97

Partner
SeniorManager

2002 E

Gross revenue

390 - 410

Total staff
Professionals

1614
1325

415

Seniorconsultant

497

Consultant
Junior254

Highlights

62

Industry(% Revenue)
ICE

32

Offerings(% Revenue)
WC HR,
eLearning,
other
CRM

FS

CIM

30

WC finance

19
19
28

25

PS

13

Total (%)

100

7

(€m)

Supply chain

34

Total (%)

100

•
•
•
•
•
•
•
•

Strong management capabilities
Performance-based compensation
Market driven organisation
Strong Financial Services position
Fast growing Public Sector presence
R&D center : Stockley Park (Cisco/MS)
Focus on global account management
Blue-chip client baseTurning Client Vision into Results

KPMG Consulting NL
Revenue (€m)

Background194

190-200

163
142
117

• Transformation from partnershipto corporate started in 1999
• Organisation in 4 Lines ofBusiness

93• Technology focus on Information
Systems
1997

Revenue
growth (%)
Ebit margin*
(%)

1998

25%

1999

• 50 staff restructured in the last 2
years

2000

2001

2002E

15%

19%

0-3%

21%

12.3% 10.6% 10%*Based on US GAAP
* Based on non audited combined financial statements

8

Turning Client Vision into Results

KPMG Consulting NL
Partner47

Seniormanager

Direct consulting staff
101

Manager
Consultant
and Junior

Gross revenue

190 - 200
1151
674
245

326

Highlights
Industry

Offerings(% Revenue)(% Staff)

CIM

23

ICE

23

Businesstransformation,
Quality, other
WC IT
CRM
WC HR

25
8
9
16

27

PS

27

Total (%)

100

9

2002 E

Total staff
Direct consulting staff
Other professionals

200

FS

(€m)

WC financeSupply chain

42

Total (%)

100

•
•
•
•
•
•
•
•

Strong management capabilities
Performance-based compensation
Market-driven organisation
Strong brand recognition
Good access at Board level with Nolan Norton
Focus on global account management
Blue chip client baseNolan Norton, KIG, Metrum

Turning Client Vision into Results

Agenda• Overview of KPMG Consulting UK & NL
• Acquisition rationale• Financials• Acquisition execution• Conclusion

10

Turning Client Vision into Results

Acquisition benefits

Geography

Industry
segments• Significant market presence in the UK and leadership in
the Netherlands• Leader in Financial Services• Improved positioning in Consumer & Industrial Markets•

Key clients11and Information, Communications & Entertainement
Stronger base in Public Sector• Extended and complementary client portfolio andimproved wallet share

Serviceofferings• Strong consulting capabilities leading to increased

Human
Resources• Enhanced managerial capabilities• Major role in market, client and solution management

outsourcing and systems integration opportunities

Turning Client Vision into Results

Strengthened position in UK and NLKPMG Consulting UK & NL
Atos Origin

Total revenue 2002E (€m)

12

CentralEuropeUK

FranceNetherlands

250

550

1000

1200

Turning Client Vision into Results

United Kingdom post-closing• Combined revenue of € 550 M - Staff : 2700
• Home to many large global clients• Increased credibility in Financial Services• Access to major European financial institutions operating in the UK• Strong base for expanding European presence in consulting• Platform to build outsourcing capability without further acquisition• Access to larger systems integration projects• Major European Partner with Oracle and strong SAP position• Base for expansion in Middle-East, Asia Pacific and US
13

Turning Client Vision into Results

The Netherlands post-closing• Combined revenue of € 1.2 bn - Staff : 9,000• 59% recurring revenue, based on multiple-year contracts• Atos Origin now the undisputed market leader• Broader and more balanced client portfolio• Board level access to clients particularly through Nolan Norton• Leverage further outsourcing opportunities in the Dutch market• Springboard for Public Sector

14

Turning Client Vision into Results

Worldwide coverage

UK
2700
France8600

Americas1450

Iberia
1 550

Netherlands
9000
Germany / CE
2250
Rest of Europe
2 600
Middle East
350

Asia/Pacific
1 150

Total No of employees : 30 000
15Turning Client Vision into Results

Stronger and broader industry focus
Atos Origin(%)
Public sector

KPMG Consulting UK& NL(%)

3

New Atos Origin(%)
Public sector

6

Financial services

27

Consumer andindustrial markets

30

Information
Communications& Entertainment

34

Other

3

Total (%)

100

17
Financial services

26
29

Consumer andindustrial markets

32

Pro forma
combination

24
Information
Communications& Entertainment

35

Other

4

Total (%)

16

30

100

100

Turning Client Vision into Results

Focus on global accounts
Atos Origin(% revenue)

42 global
accounts

KPMG Consulting UK & NL(% revenue)55%
Sum of eachcountry top
10 clients

Total (%)

100

Total (%)

32%
100

Strong potential to improve presence within clients
17

Turning Client Vision into Results

Atos Origin Key clients
Enhanced wallet share
Inform, Com & Entertain.
Philips (Worldwide)
Lucent (8 countries)
FT - Equant (France)
KPN (Netherlands)
Vodafone (2 countries)
Vivendi Universal (France)
Flextronics (2 countries)
Telefonica (Iberia, Lat. Am.)

Akzo Nobel (Worldwide)
Acordis (3 countries)
EDF (France)
FIAT (France, Italy)
Novartis (4 countries)
ICI (6 countries)
Aramco (Middle East)
ENI (Italy)
Exxon Mobil (7 Countries)
Shell (12 countries)
Consumer & Ind. Markets Total Fina Elf (France)
Philip Morris (10 countries)
Peugeot (France)
Procter & Gamble (10 countries) Renault (France)
Unilever (9 countries)
DSM (Netherlands)
PPR (France)
Repsol (Iberia, Lat. America)

18

Finance & Banking
ABN Amro (Fce, Brazil, Nl)
BNP Paribas (France)
Credit Lyonnais (France)
Fortis (France, Belux, Nl)
HSBC - CCF (France)
Deutsche Bank (Ger. Sp.)ING (Netherlands, Belux)
Société Générale (Frce)Axa (Fce, Belux, UK, Germ.)
Euronext (20 countries)
Rabobank (Netherlands)
Public Sector / OtherANPE (France)
Dutch Env. Ministry (Nl)French Edu. Ministry (Fr)Turning Client Vision into Results

KPMG Consulting key clients
Extended delivery prospect
Inform, Com & Entertain. Cons. & Ind. Markets Finan. Services
Canon
HP
Matsushita
Microsoft
Philips
Bbned
BT Cellnet
C&W
Colt
EquantHutchinson 3G
KPN
NTL
Reed Elsevier
Reuters
UB mediaVizzavi
Vodafone
Wolters Kluwer

19

Ahold
Airbus
Akzo Nobel
Astra Zeneca
AventisBAE systems
Boots
BP
DiageoGlaxo Smith Kline
HeinekenHuntsman
Kimberly Clark
Nestlé
PfizerPhilip Morris
Shell
TNT
UnileverABN Amro
AchmeaAXA
B. Of Scotland
Barclays
CGNU
CSFB
Deutsche Bank
FortisING
JP Morgan
Lloyds TSB
Prudential
Rabobank
RBoS
Swiss Re
ZurichPublic Sector
UK D. for intern. Develop
UK D. of Environment
Food & Rural Affairs
UK D. of Work & Pensions
UK Foreign Office
UK Local Authorities
UK Ministry of Defense
UK National Health Serv.
UK Postal Services
Main Dutch Ministeries
Main Dutch R. Estate

Turning Client Vision into Results

Full end-to-end coverage
Atos Origin KPMG Consulting UK & NL(%)(%)

Managedservices

Onlineservices
Systems
integration

Managedservices

44

37

Pro forma
combination

12

100

Onlineservices

10

Systems
integration

35

Consulting

18

50%
recurring
revenue

42

Consulting

2

Total (%)

100

20

New Atos Origin
(%)

100

100
Turning Client Vision into ResultsComplementary service offerings
Organisation consulting& Information systems

Implementation

Operations(e-) Supply chain(e-) CRM(e-) ERP Integration(e-) Enterprise integration
Atos Origin packaged (e-)solutions (securities, payment…)(e-)Technology infrastructure
Change management

KPMG Consulting

21

Atos Origin
Turning Client Vision into Results

Human Resources
Strengthened business model• Enhanced managerial capabilities• Huge potential for developing key accounts• Major role in market, global accounts and solution management• Accelerate market focused organisation

Atos Origin’s business development accelerated by 2-3 years

22

Turning Client Vision into ResultsWrap-up
A major strategic move

• Excellent platform of consulting operations in Europe• Strong brand name in the UK and NL• Significant presence in the UK• Market leadership in the Netherlands• Atos Origin was selected as the best partner

23

Turning Client Vision into Results

Agenda• Overview of KPMG Consulting UK & NL
• Acquisition rationale• Financials• Acquisition execution• Conclusion

24

Turning Client Vision into Results

Transaction structure• Total consideration : € 657 M– Cash : € 422 M– 3.66 M new shares @ € 64.2 : € 235 M• Shares will be issued as ORA’s, converted 1 year after closing• Issued share capital will increase by 8.3%
• Cash payment financed by long term debt
• Earn out : max 1.4 M new shares to consulting partners

25

Turning Client Vision into ResultsAudit partners? Consideration : € 470 M (71% of total)• € 356 M cash
• 1.77 M shares @ € 64.2 per share : € 114 M– 1 year lock-up on shares after closing– Audit partners will own 3.7% of new Atos Origin** Post ORA conversion, non diluted

26

Turning Client Vision into Results

Consulting partners? Consideration : € 188 M (29% of total)• € 67 M cash
• 1,89 M shares @ 64.2 € per share : € 121 M– A maximum 4 year lock-up on shares after closing– A quarter released every 12 months– Consulting partners will own 4.0% of new Atos Origin*? Earnout• Based on revenue and Ebit targets for 2002 (40%) and 2003 (60%).
• Maximum new shares : 1,4 M? Entry stock option grants* Post ORA conversion, non diluted

27

Turning Client Vision into Results

Shareholding structure

31-May-02
non diluted

Post closing
fully diluted**(M shares)(%)(M shares)(%)(M shares)

(%)

-

-

1,8
1,9

3,7%
4,0%

1,8
3,3

3,0%
5,6%

21,3
2,2
0,3
0,3
19,8
43,9

48,6%
4,9%
0,7%
0,7%
45,1%
100,0%

21,3
2,2
0,3
0,3
19,8
47,5

44,9%
4,6%
0,6%
0,6%
41,6%
100,0%

26,1
2,2
4,4
0,3
21,2
59,3

44,0%03,6% 07,5% 00,5% 035,8%100,0%

KPMG
Audit partners
Consulting partners
Philips
BNP Paribas
Employees
Treasury stock
Free float
Total* Assumes full conversion of ORAs

28

Post closing
non diluted***see comments in appendix re. potential dilution

Turning Client Vision into Results

Financial summary• Consolidation from July 2002
• Pro forma equity as of Dec 2001 : € 714 M*• Pro forma net debt as of Dec 2001 : € 691 M*• Net debt to combined pro forma ebitda : 1.4• Transaction will be earnings enhancing before goodwill* Based on combined pro forma balance sheet as of Dec 2001 : see appendix

29

Turning Client Vision into Results

Timetable• Announcement

June 5, 2002

• Partners’ vote

June 2002• Regulatory approvals

Prior to closing• Extraordinary shareholder meeting to approve issuance

July 2002• Expected closing

July 2002

Note : subject to regulatory approvals

30

Turning Client Vision into Results

Agenda• Overview of KPMG Consulting• Acquisition rationale• Financials• Acquisition execution• Conclusion

31

Turning Client Vision into Results

Plan of action• There must be strong complementarity / fit– Top line synergies– Margin improvement• Clear strategic intent / clear disposal strategy– Industry sectors – Clients – Skills & offerings– Disposals• Management structure must be clear (no compromises)– New structure to be announced• Communication– Internal – Markets – Clients• Speed of implementation– First decisions on Day 1
32

Turning Client Vision into Results

Management Board
Region responsibility• Bernard Bourigeaud, CEOCentral Europe• Wilbert Kieboom

NL, Belux• Dominique Illien

France, Italy, Spain, Lat. America• Tim Lomax

USA, Middle East, Asia Pacific• Jeremy Anderson

UK• Eric Guilhou, CFO• Jans Tielman, HR & Coms

33

Turning Client Vision into Results

Organisation• Jos Zandhuis– Joins the Management Board of Region 1– Responsible for overall C&SI in the Netherlands– Reports to Wilbert Kieboom• Marten La Haye
– CEO of Consulting operations in the Netherlands– Reports to Jos Zandhuis• Paul Bingham– Head of MS and SI in the UK– Reports to Jeremy Anderson
34

Turning Client Vision into Results

Organisation (continued)• B. Bourigeaud leads the newly created Global Consulting service line
• Atos Origin organised in 4 service lines :– Consulting– System integration– Managed Services– On Line Services• Consulting will operate as separate entity in each country– Consulting brand in the UK and NL : Atos KPMG Consulting– Brand retained for up to 3 years

35

Turning Client Vision into Results

Business model
Market Managers
Financialservices

Information,
Consumer. &Communication &Industrial Markets
Entertainment

Public Sector

Global Account Managers
Consulting
Consulting
GlobalGlobalSI
SI Global
GlobalMS
MS Global
GlobalOLS
OLS Global
GlobalInternational
International
Competencies
Competencies &&Alliances
Alliances

Solution Directors
36

Turning Client Vision into Results

Timetable37• Deal announcement

June 5, 2002

• Top management structure• Country organisation• Detailed organisation structure• Internal roadshows

Day 1
Day 1
June
June-July• Expected closing

End July• Key client visits• Full commercial review• Full financial review• Completion of operational systems review• Kick-off meeting

June-September
July
July
End September
December• Merger completion

End December
Turning Client Vision into Results

Top line synergies• Increase revenues by selling to each other’s existing client base
• Leverage our complementary industry knowledge• Leverage our complementary solution skills portfolio• Leverage our global presence

38

Turning Client Vision into Results

Plan of action
Margin improvement• Replace subcontractors on SI projects by own staff• Cessation of shared services at the end of 2003
• Combined cost synergies– Purchasing– R&D– Premises– Infrastructure

39

Turning Client Vision into Results

Consulting backdrop• Tough environment in consulting during 2001 and H1 2002
• Revenue decline expected in 2002
• Restructuring actions to address current adverse market• Positioning to become completely independent from audit• Prospect of return to high revenue growth rates

40

Turning Client Vision into Results

Atos Origin going forward• Existing Atos Origin financial outlook remains valid• KPMG Consulting will be consolidated from July 2002
• Increase of 10% in Group revenues for 2002
• Operating margin confirmed at 9.5%

41

Turning Client Vision into Results

Agenda• Overview of KPMG Consulting• Acquisition rationale• Financials• Acquisition execution• Conclusion

42

Turning Client Vision into Results

Conclusion
KPMG Consulting UK & NL

Atos Origin• UK & NL only
• Clear strategy• Well prepared for sale
• Market-oriented structure• Proven track record in M&A• Earn-out incentive• Understanding of consulting business

New Atos Origin• No overlap• Shared strategic vision• Common business model• Separate activities• Cultural fit

43Turning Client Vision into Results

Values• Customer dedication• Commitment to execute• Conviviality• Entrepreneurship and team spirit• Profitability

44

Turning Client Vision into Results

Vision• End to end service offerings• Balanced mix of consulting, build and run• Capitalize on industry sector knowledge• Develop a focused management consulting practice• Focus on clients• Leverage strong HR management
Build on global presence

45

Turning Client Vision into Results

Atos Origin

A client centric company with global operations… powered by people

46

Turning Client Vision into ResultsAnnexes

47

Turning Client Vision into Results

KPMG Consulting UK & NL
P&L
(M€)

2000

2001

Revenue

637

740

Income from operations
Net financial expense
Non reccuring items*
Corporate income tax
Minority interests

50
-1
-13
-12
0

83
-2
- 44
-12
-2

Net income before amortization of goodwill

24

23

Amortization of goodwill00

Net income for the period - group share24

26

Non recurring items

827

Net income before exceptional

32

53* Refer to slide 6 and 8 for comments on non recurring items

48

Turning Client Vision into Results

Combined proforma Balance sheet
at December 31, 2001
KPMG
Fair value
Consulting
adjustments
UK & NL(M€)

Atos Origin
31-Dec-01

Goodwill
Other Intangible assets
Other Fixed Assets
Working Capital

405
23
344
193

0
0
11
84

Total

965

94

0

EquityProvisions
Net debt

479
251
235

64
2
28

-31
31

Total

965

94

0

KPMG
Acquisition Conso.
NL+ UK
00
1184

Atos Origin
Post closing

663

630
-663

1035
23
355
277

94

663

-33

1689

33
33
28

235

-33

714
284
691

94

663

-33

1689

428

Notes :• Purchase price (€ 663 M) = transaction price (€ 657 M) + acquisition costs (€ 6 M)
• Net debt from acquisition (€ 428M) = transaction price (cash part : € 422 M ) + acquisition costs (€ 6M)• Fair value adjustments (€ 31 M) = pension provisions + disentanglement of shared services• Goodwill = purchase price (€ 663 M) – equity (€ 33M)

49

Turning Client Vision into ResultsPotential shareholding dilution
(1/2)
(#)
New shares to Audit partners

1 768 000

New shares to Consulting partners

1 889 000

New shares issued to vendors

3 657 000

Earnout
Potential shares from warrants (BSA) to consulting partners

1 412 500

Maximum new shares issued for the transaction

5 069 500

Dilution (as of December 2001)
Shares issued to employees (stock subscription options)Shares issued to employees (AOwner)
Shares issued for convertible bonds (2004)
Shares issued for Philips warrants (class A & B)

3 994 172122 5221 440 501
4 774 826

Total new shares (fully diluted basis)

15 401 521

50Turning Client Vision into ResultsPotential shareholding dilution(2/2)• Note 1
Under the terms of the transaction, Consulting partner in KPMG Consulting UK and NL may receive up to
1,4 Million shares under the term of the Earn-out agreement.

• Note 2
Under the terms of the Atos Origin merger in October 2000, Philips received two tranches of warrants (‘A’and ‘B ’ warrants), the exercise of which is linked to movements in the Atos Origin share price. The issue of thesewarrants may be regarded as additional incentive consideration since the consideration payable for each tranche is anominal 1€. Each tranche consists of 2,387413 stock subscription warrants. Philips may exercise the ‘A’ warrants if the
Atos Origin share price exceeds € 156 on 12 consecutive days before June 30th 2002. Philips may exercise the‘B’warrants if the Atos Origin share price exceeds € 208 on 12 consecutive days before June 30th 2003. Immediately
after exercising warrants Philips may not hold more than 35% of the total issued share capital of Atos Origin.

• Note 3
In June 1999, Atos issued convertible bonds in the amount of € 172.5 Million (traded under Euroclear,code 180810). A total of 1,440,501 bonds with a face value of € 119.8 were issued and the bonds pay interest at 1%
per annum . They are redeemable on October 1st, 2004 at a price at € 131.4, representing a yield to maturity of 2.75%,
or at any time from October 1st, 2002 at the issuer’s initiative, with a premium. The bonds may be converted at any
time from July 6th 1999 onwards on the basis of one share per bond• Note 4
The were 3,779172 share options and stock subscription warrants (‘C’, ‘D’, and ‘E’ warrants) outstandingat December 31st, 2001 at prices ranging between € 23 and € 160, at various times between now and 2011. Moreover
215 000 stock options are granted to key KPMG Consulting people as they join the Group.

• Note 5
In May 2002 « Aowner » gave each Atos Origin employee the opporunity to acquire shares at a 20%
discounted price and to receive 1 stock subscription option for each lot of 4 stocks purchased. 122 522 shares havebeen issued (98561 stocks and 23961 options).

51

Turning Client Vision into Results