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Unilog SA

Unilog SA

97-99 Boulevard Péreire
75017 Paris
France
Telephone: (+33) 1-40-68-40-00
Fax: (+33) 1-40-68-40-05
Web site: http://www.unil

Public Company
Incorporated: 1968 as Informatique et Entreprise
Employees: 5,531
Sales: EUR 479 million ($450.5 million) (2000)
Stock Exchanges: Euronext Paris
Ticker Symbol: UNG
NAIC: 541511 Custom Computer Programming Services; 541513 Computer Facilities Management Services; 541512 Computer Systems Design Services

Fast-growing Unilog SA is a leading information technology (IT) consultant, engineering services, and training services provider. One of the top 10 IT consultants in France, the company also holds top positions in Germany, and in French-speaking Switzerland, and is building up its presence in Austria and the United Kingdom as well. Unilog is organized into three primary divisions: Unilog Management; Unilog IT Services; and Unilog IT Training. Unilog Management groups the companys consulting arm with 500 consultants providing process enhancement and information systems consulting services throughout France and Germany. Unilog Management provided 18 percent of revenues in 2000. Implementing the companys IT systems is its largest unit, Unilog IT Services, providing onsite implementation and upgrading of client IT systems; the company also offers permanent onsite management and maintenance services. IT Services generates 71 percent of Unilogs revenues of EUR 479 million in 2000. Lastly, the company has been building its IT Training division, primarily through its acquisitions in Germany since the late 1990s, providing training services especially to its Management and IT Services clients. IT Training has grown from just 2 percent of sales in 1997 to 11 percent of sales in 2000. Listed on the Paris stock exchange since 1988, Unilog is led by Chairman, President, and cofounder Gérard Philippot.

An IT Services Pioneer: 1960s

The formation of Unilog dates to 1968 when Gérard Philippot and four partners created the company Informatique et Entreprise. The young Paris-based company quickly began to branch out into a variety of areas of the nascent French computer industry. In 1970, the company formed Investissement Informatique, a holding company that served as an umbrella for a number of new companies, each dedicated to a particular specialty in the computer business. As such, the company was able to gain expertise in a variety of areas in the dawning Information Technology sector, including computer engineering, minicomputers, microprocessing, and office systems.

The company saw steady growth throughout the 1970s and was able to boast repeated profits, despite a long recession. In 1982, the company decided to group its various subsidiaries under a single company name, Unilog. Over the next five years, Unilog continued to develop its expertise, while retaining a focus on the Paris region. Yet the company soon began to prepare to take its operations to a higher level of activity. As part of its new ambitions, the company reorganized its share capital, creating a new holding company, Unilog Associés, owned by the companys founders and management. The creation of this new shareholder structure served to protect the companys independence, guaranteeing that majority control of Unilog was to remain with the company.

In 1987, Unilog made two important expansion moves. The first was to open an office in Lyon, marking its first entry into the French regional market and the first step to offering national coverage. That same year, Unilog launched a new consulting service, which later became known as Unilog Management. The addition of this new unit added support services for its existing systems integration business. The move was a propitious one, as information technology was set to enter a new era of importancebefore becoming a critical part of the global corporate landscape. Unilog now sought to step up its growth; in 1988, the company attracted fresh capital by listing on the Paris stock exchanges secondary market.

Unilog expanded steadily into the 1990s, maintaining its record of unbroken profitability while continuously building up its revenues. By 1996, the company was posting the equivalent of EUR 136 million. The companys IT services wing remained the motor for the companys growth, representing more than 80 percent of sales. Until the second half of the decade, Unilogs growth had been wholly internal, as the company won clients among Frances largest industrial corporations, banks, and government agencies.

Acquiring Size for the 21st Century

Unilog made its first external growth moves in 1996. In that year, the company acquired two new subsidiaries, Sinorg and Alcatel TITN Answare, both of which had built up agency networks throughout France. The two acquisitions boosted the companys employee total by 400, and also transformed its geographic balance. By the end of that year, the company had reduced the importance of the Paris area to its sales, while its new national coverage boosted regional operations to account for 34 percent of sales. For the time being Unilog remained focused on the French market. In 1997, the company started an acquisition of former public sector IT consulting services provider Cesia. That bid was approved and by December 1998 the company had acquired more than 78 percent of Cesia. Unilog boosted that holding to 100 percent in 2000.

By then, however, Unilog had expanded its focus beyond France. In April 1998, the company acquired 40 percent of Bremen, Germany-based Vulkan Software Systems (VSS), paying the equivalent of more than EUR 4 million. Three months later, Unilog made a new acquisition in Germany, this time of the Integrata Group, based in Tubingen in southern Germany. The company initially acquired a 90 percent stake in Integrata, which was one of the top 15 systems integrators in the German market; by the end of that year, Unilog held 99.9 percent of Integrata, for a cost of EUR 25.4 million.

The Integrata acquisition not only gave Unilog a major stake in the German market, it also gave it a strong new training services operation. Until then, Unilogs own training services operations accounted for little more than 2 percent of its revenues. The acquisition of Integrata was to boost its training sales to 11 percent of revenues by the end of the century. By the end of 1998, its sales had jumped to EUR 285.4 millionthe German market now accounted for nearly 20 percent of Unilogs sales. While its acquisitions formed a major part of the companys revenue growth, organic growth remained high as wellas much as 20 percent of the rise in Unilogs revenues were attributed to its own business development, as the company benefited from the rush to secure computer systems against the Y2K bug, and as French businesses in general stepped up their IT spending.

Not all of Unilogs attempts to expand were successful. In 1998, the company sought to acquire Ploenzke, based in Germany, and Data Science, based in Great Britain, but found itself outgunned by Computer Science Corp. and then IBM. Unilog was more successful in continuing its expansion the following year with the acquisition of fellow French IT specialist New Software Associates for EUR 19 million. That company featured a team of 250 engineering and integration specialists working in offices in seven major French cities. By the end of 1999, Unilogs revenues had grown past EUR 391 million. In that year Unilog, which continued to post its unbroken record of profitability, was also admitted to the Paris bourses monthly settlement market.

The year 2000 brought renewed impetus to Unilogs expansion. In January, the company acquired 70 percent of GDI, based in Switzerland and active especially in the countrys French-speaking region. By the end of the year, Unilog had paid more than EUR 12 million to acquire all of GDI, adding that companys 1,000 employees. The year 2000 also saw the companys participation in the formation of Escan, a European economic interest group, with partners Ibermatica of Spain and Engeneering Ingegneria Informatica of Italy. This alliance was formed in order to create a single-branded range of marketable service projects for the European market countries in an effort to head off foreign competition, particularly from IT heavyweights arriving from the United States.

Rounding out 2000, Unilog completed its acquisition of VSS for EUR 12 million. VSS was then merged into Integrata, with the former companys 250 engineers added to the payroll. In an era when qualified computer engineers and related specialists were in drastically short supply, acquisitions had become a popular means of overcoming recruitment hurdles and securing new personnel.

In September 2000, the company moved to restructure its consulting operations, grouping all consulting activities under a newly created subsidiary, called Unilog Management. This company now represented one-fifth of Unilogs total operations, with revenues split between France at 80 percent and Germany at 20 percent.

The slump in the high-technology sector had as a result a drop in confidence in Unilogs stock as well. As warnings of an economic slowdown began to waft over to Europe from the United States, Unilog nonetheless expressed its confidence in its continued expansion, forecasting continued growth in the 15 to 20 percent range. The company also announced its intention to continue its external expansion moves. In May 2001, the company made two new acquisitions. The first was of Mind France, the Paris-based subsidiary of Swedens Mind AB, a web creation agency. This acquisition was meant to boost Unilogs growing interest in the e-commerce market. The second acquisition came at the end of May, when the company acquired the technology division of marchFIRST, a company based in the United Kingdom specializing in Internet applications consulting.

Company Perspectives:

Throughout Europe, UNILOG offers its technological expertise to large companies. Within a context of respect for the variety of cultures, we are proud of building together integrated and scalable innovative solutions that help our customers achieve their strategic goals .

This new acquisition coincided with the adoption of a strategy focusing on the three key markets of France, Germany, and the United Kingdom, which together accounted for 60 percent of the European IT services market. As Unilog continued to seek new acquisitions in 2001, its ambitions were clearly to become a major IT consulting and services company for the European market.

Principal Subsidiaries

Cesia SA; GDI Gestion et Diffusion (Switzerland) ; New Software Associates Lille SA; New Software Associates Lyon; New Software Associates SARL; Unilog Integrata AG (Germany) ; Unilog Integrata UB GmbH (Germany) ; Unilog Integrata Training AG (Germany) ; Unilog Integrata Lehrgänge GmbH (Germany) ; Unilog Integrata AG (Switzerland) ; Unilog Integrata GmbH (Austria) ; Unilog Liban (Lebanon; 34.50%) ; Unilog Régions SA; Win Conseil SA.

Principal Divisions

Unilog Management; Unilog IT Services; Unilog IT Training.

Principal Competitors

Accenture Ltd.; Acer Inc.; Atos Origin; Bull SA; Cap Gemini Ernst & Young; CMG plc; Compaq Computer Corporation; Computer Associates International, Inc.; Computer Sciences Corporation; Dell Computer Corporation; Electronic Data Systems Corporation; Finsiel S.p.A.; Fujitsu Limited; Gateway, Inc.; Getronics NV; GFI Informatique SA; International Business Machines Corporation; International Computers Limited; Logic Plc; NEC Corp.; Sema Group; Siemens AG; Sopra SA; Group Steria SCA; Sun Microsystems Inc.; Toshiba Corp.; Unisys Corp.

Key Dates:

1968:
Informatique et Entreprise is created.
1970:
Investissement Informatique is formed as a holding company for a number of new companies, each dedicated to a particular specialty in the computer business.
1982:
Company and subsidiaries regroup as Unilog.
1987:
Company opens first regional office, launches consulting services.
1988:
Unilog raises capital by listing on the Paris stock exchange secondary market.
1999:
Company acquires French IT specialist New Software Associates, posts revenues of EUR 391 million.
2000:
Unilog forms Escan alliance with partners Ibermatica of Spain and Engeneering Ingegneria Informatica of Italy to create a single-branded range of services for the European market.
2001:
Company acquires web site developer Mind France, the Paris-based subsidiary of Swedens Mind AB; purchases the technology division of U.K.-based marchFIRST, a specialist in Internet applications consulting.

Further Reading

Bougeard, Marion, Comme la majorité des SSII, Unilog affiche sa confiance pour 2001, La Tribune, April 6, 2001.

Mazier, Hélène, Unilog prevoit une croissance interne de 15 à 20% en 2001, La Tribune, April 5, 2001.

Unilog Moves into Great Britain Following Acquisition, European Report, June 20, 2001.

Unilog optimiste pour 2001, Les Echos, April 6, 2001.

M. L. Cohen

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