T-Systems just published its Q4 and FY 2012 results. Total revenue grew +5% in Q4, and +2.5% excluding captive revenue. For the full year revenue increased +0.6% (both total and non-captive). Both in Q4 and for the full year international revenue (+6%) was the main locomotive of growth. Adjusted EBIT margin raised to 2.4% in Q4 and 1.1% for the FY; this is a substantial improvement compared with FY 2011 (0.2%), however clearly profitability has remained a challenge. Growth in Q4 was supported by a few major deals: Shell (prolongation and extension), Presbyterian and Land of Low Saxony.
The full year growth performance (+0.6%) sounds low… However it is very similar to the organic/ constant currency performance reported by Atos (+0.8%), Capgemini (+1.2%), HP (-0.5%) or IBM Global Services (flat), reflecting the overall market environment and in particular the extreme pressure on Infrastructure Services prices. Cloud Computing is for sure generating new opportunities; however it has a similar impact on the price level as the Internet for telecom operators in the last 15 years…
Clearly T-Systems has done a good job in the last 3 years on its Portfolio, on its Delivery organization (Quality and Customer Satisfaction improved to a very good level) and on its Marketing. Now, T-Systems needs to harvest some more sales success, like in 2008-2009. At that time T-Systems chocked on too many major wins… However, today, the organization is able to master new deals.
T-Systems also needs to further upgrade its positioning. The company addresses the right topics with the right offerings, however T-Systems is still too often perceived as an Infrastructure Services provider. The recent reorganization should help solve this challenge!