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Press Release
Market Update
Atos confirms FY 2023 revenue and operating margin results in
line with guidance
• Revenue: €10,693m, up +0.4% organically
Eviden up +2.9% organically
Tech Foundations down -1.7% organically
• Operating margin of 4.4% (€467m), up +170 bps organically
With year-on-year improvements in both Eviden and Tech Foundations
2023 H2 Free Cash Flow of €-109m
• FY 2023 Free cash flow of €-1,078m, reflecting lower working capital actions
and higher reorganization costs
Net debt position of €2,230 million at year-end 2023
• Bank covenants met
• Gross debt of €4,654m
• Cash, cash equivalent & short-term financial assets of €2,423m
FY 2023 earnings release rescheduled for March 20th to complete
audit of non-cash goodwill impairment charge
• External auditors, Deloitte and Grant Thornton awaiting review of independent
business report to complete audit of non-cash goodwill impairment
Discussions with EPEI on potential sale of Tech Foundations have
concluded with no deal reached
• Proposed new deal terms and pricing could not be mutually agreed upon
• No indemnification by either party
• Each party released from any reciprocal obligations except for confidentiality
• Atos to operate Tech Foundations and Eviden as separate businesses with a
coordinated go-to-market strategy
• Atos to continue to consider strategic options that are in best interest of its
customers, employees, and shareholders
Paris, February 28, 2024
Atos reports today that it has met its full year guidance for revenue and operating margin
and that its free cash flow for the second semester was €-109 million.
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Comparison with 2023 guidance for revenue and operating margin by business as well as
free cash flow is presented in the table below:
2022
Organic
growth %
2023
(€ million)
2023
Organic
growth %
Guidance
2023
Group revenue
0.1%
10,693
0.4%
0.0% to 2.0%
Eviden revenue
2.0%
5,089
2.9%
Acceleration vs. 2022
Tech Foundations revenue
-1.6%
5,604
-1.7%
Managed decrease
2022
OM%
2023
(€ million)
2023
OM%
Guidance
2023
Group operating margin
3.1%
467
4.4%
4% to 5%
Eviden operating margin
5.2%
294
5.8%
Improvement vs. 2022
Tech Foundations operating margin
1.3%
172
3.1%
Positive territory
2022
(€ million)
2023
(€ million)
Guidance
compliance
Guidance
2023
Free cash flow
-187
-1,078
c. €-1,000
Net debt and debt covenant
In addition, the Company reports that its net debt was €2,230 million at year-end 2023
and consisted of:
• Cash, cash equivalent and short-term financial assets of €2,423 million
• Borrowings of €4,654 million
The Group remained within its borrowing covenant applicable to its banks financing, with
a leverage ratio (net debt divided by pre-IFRS 16 OMDA) of 3.34 times at the end of
December 2023 compared with the bank covenant of 3.75x.
Non-cash goodwill impairment
Full annual goodwill impairment test is performed at year end, in compliance with IAS 36
and in the context of the contemplated disposals of assets. Fair values are determined
based on a multicriteria approach, including Discounted Cash Flows (“DCF”) and trading
multiples, consistent with the methodology applied previously.
Group external auditors Deloitte and Grant Thornton are awaiting an independent business
review report to complete their audit of the company’s non-cash goodwill impairment
results.
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Reschedule of the earnings publication
The Company is rescheduling its full earnings release to March 20
th
, 2024, as Atos Group
auditors Deloitte and Grant Thornton have not completed their audit work on the goodwill
impairment.
End of exclusive negotiations with EPEI for the sale of Tech Foundations
The company indicates that in the context of its exclusive negotiations with EP Equity
Investment (“EPEI”) for the potential sale of Tech Foundations announced on August 1,
2023, the parties have not reached a mutually satisfactory agreement. The discussions
and the put agreement have therefore been terminated by mutual consent, with no
indemnification on either side and the parties are released from any future reciprocal
obligation subject to maintaining the confidentiality agreements. Atos will continue to run
Tech Foundations and Eviden as separate businesses and leverage the strengths of their
respective offerings with a coordinated go-to-market strategy. Atos will continue to
consider strategic options that are in the best interest of its customers, employees and
shareholders.
Management conference call
Management invites you to an international conference call on Wednesday, February
28 2024 at 08:00 am (CET – Paris).
You can join the webcast of the conference:
- via the following link: https://edge.media-server.com/mmc/p/chprpvb2
- by telephone with the dial-in, 10 minutes prior the starting time. Please note that
if you want to join the webcast by telephone, you must register in advance of
the conference using the following link:
https://register.vevent.com/register/BI78a1dc5b26674cac9b424698c2f
24fe2
Upon registration, you will be provided with Participant Dial In Numbers, a Direct
Event Passcode and a unique Registrant ID. Call reminders will also be sent via
email the day prior to the event.
During the 10 minutes prior to the beginning of the call, you will need to use the
conference access information provided in the email received upon registration.
After the conference, a replay of the webcast will be available on atos.net, in the
Investors section.
***
Contacts
Investor relations
Individual shareholders
0805 65 00 75
Press contact
globalprteam@atos.net
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FY 2023 Revenue and operating margin at constant scope and exchange rates
reconciliation
For the analysis of the Group’s performance, revenue and OM for 2023 is compared with
2022 revenue and OM at constant scope and foreign exchange rates. Reconciliation
between the 2022 reported revenue and OM, and the 2023 revenue and OM at constant
scope and foreign exchange rates is presented below, by Business Lines and Regional
Business Units.
In 2023, revenue was negatively impacted by €62 million as a consequence of the Group
review of its accounting of some software resales following the IFRIC IC decision illustrated
by the decision published by ESMA in October 2023 that enacted a restrictive position on
the assessment of Principal vs. agent under IFRS 15 for the resale of third-party software
licenses. This impact affected Eviden in the Americas RBU. It had no impact on the
operating margin. Revenue for the 12 months period ended December 31, 2022 was
restated accordingly by €-71 million.
FY 2022 revenue
in € million
FY 2022
published
Restatement
FY 2022
restated
Internal
transfers
Scope
effects
Exchange
rates
effect on
acquired
/
disposed
perimeter
Exchange
rates
effects
FY
2022*
Eviden
5315
-71
5244
-4
-220
2
-80
4943
Tech Foundations
6026
6026
4
-222
2
-106
5703
Total
11341
-71
11270
0
-442
4
-186
10646
FY 2022
Operating margin
in € million
FY 2022
published
Restatement
FY 2022
restated
Internal
transfers
Scope
effects
Exchange
rates
effect on
acquired
/
disposed
perimeter
Exchange
rates
effects
FY
2022*
Eviden
276
0
276
-2
-32
0
-10
233
Tech Foundations
79
79
3
-22
0
-5
56
Others & Global
Structures
0
0
-2
1
0
0
Total
356
0
356
0
-53
1
-15
289
* : At constant scope and foreign exchange rates
Scope effects on revenue amounted to €-438 million. They mainly related to the divesture
of Atos satellite ground testing business and Russia in 2022, and in 2023 to the divestures
of Italy in Southern Europe, of Unified Communications and Collaboration Services across
all regions, of EcoAct in Americas, Southern Europe and Northern Europe & Asia-Pacific,
of State Street in Americas, and of Elexo in Southern Europe.
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Currency effects negatively contributed to revenue for €- 186 million. They mostly came
from the depreciation of the American dollar, the British pound, the Argentinian peso, and
the Turkish lira.
Internal transfers adjustments reflected split of Processia perimeter from Americas to
Northern Europe & Asia-Pacific and to Southern Europe.
***
About Atos
Atos is a global leader in digital transformation with 95,000 employees and annual revenue
of c. €11 billion. European number one in cybersecurity, cloud and high-performance
computing, the Group provides tailored end-to-end solutions for all industries in 69
countries. A pioneer in decarbonization services and products, Atos is committed to a
secure and decarbonized digital for its clients Atos is a SE (Societas Europaea), listed on
Euronext Paris.
The purpose of Atos is to help design the future of the information space. Its expertise
and services support the development of knowledge, education and research in a
multicultural approach and contribute to the development of scientific and technological
excellence. Across the world, the Group enables its customers and employees, and
members of societies at large to live, work and develop sustainably, in a safe and secure
information space.
Disclaimer
This document contains forward-looking statements that involve risks and uncertainties,
including references, concerning the Group's expected growth and profitability in the
future which may significantly impact the expected performance indicated in the forward-
looking statements. These risks and uncertainties are linked to factors out of the control
of the Company and not precisely estimated, such as market conditions or competitor's
behaviors. Any forward-looking statements made in this document are statements about
Atos’s beliefs and expectations and should be evaluated as such. Forward-looking
statements include statements that may relate to Atos’s plans, objectives, strategies,
goals, future events, future revenues or synergies, or performance, and other information
that is not historical information. Actual events or results may differ from those described
in this document due to a number of risks and uncertainties that are described within the
2022 Universal Registration Document filed with the Autorité des Marchés Financiers (AMF)
on April 21
st
, 2023 under the registration number D.23-0321. Atos does not undertake,
and specifically disclaims, any obligation or responsibility to update or amend any of the
information above except as otherwise required by law. This document does not contain
or constitute an offer of Atos’s shares for sale or an invitation or inducement to invest in
Atos’s shares in France, the United States of America or any other jurisdiction.
This document includes information on specific transactions that shall be considered as
projects only. In particular, any decision relating to the information or projects mentioned
in this document and their terms and conditions will only be made after the ongoing in-
depth analysis considering tax, legal, operational, finance, HR and all other relevant
aspects have been completed and will be subject to general market conditions and other
customary conditions, including governance bodies and shareholders’ approval as well as
appropriate processes with the relevant employee representative bodies in accordance
with applicable laws.
Revenue organic growth is presented at constant scope and exchange rates.
