Atos more cautious for 2022 after sharp drop in half-year results, Company News

PARIS (Agefi-Dow Jones). Digital services firm Atos announced on Wednesday a sharp drop in its first-half results for this year and is forecasting full-year 2022 operating margins and cash earnings. at the bottom of the previously set ranges.

In the first half of this year, Atos generated revenue of €5.56 billion, down 0.6% at constant exchange rates and down 2.1% organically compared to last year. In the second quarter alone, organic revenue decreased by 1.9%.

The operating margin in the first half of 2022 was EUR 59 million compared to EUR 302 million in the first half of 2021, or 1.1% of revenue, compared to a margin of 5.6% recorded a year earlier.

Free cash flow for the last half of the year was negative by 555 million euros against an outflow of 369 million euros a year earlier.

Atos posted a net loss of 503 million euros in the first half of this year, compared to a loss of 129 million euros in the first half of 2021. 119 million euros against a profit of 162 million in the first six months of 2021.

New secured loan

In terms of guidance for 2022, Atos indicated that it now expects to reach the lower end of its operating margin forecast range of between 3% and 5% and operating cash flow in the range of -150 million euros to 200 million euros. Atos also confirmed that it expects its revenues to rise at a constant exchange rate from a 0.5% decline to a 1.5% increase this year.

However, the group expects a recovery in its results in the second half of the year, expecting a return to positive growth at constant exchange rates, as well as an improvement in operating margins and cash flow.

The company also announced that it has received new bank financing planned as part of its transformation plan, which was announced on June 14. As such, Atos received a commitment from its banks to convert part of its Revolving Credit Facility (RCF) – up to EUR 1.5 billion out of a total of EUR 2.4 billion – into an 18-month term unsecured loan and two 6-month loans . extensions at the discretion of the company.

Asked during a conference call with reporters about the interest rate of this new loan, CFO Natalie Senesho said the company “cannot communicate” on the matter “at this stage.” “The increase in the cost of refinancing is fully built into our financing plan and our forecasts for 2022,” she nevertheless assured.

On June 14, Atos unveiled a strategic plan to split the group into two separate companies. The first company will retain the Atos name and consolidate historic data center infrastructure management activities. The second will be named Evidian and will combine activities related to digital transformation, as well as big data and security (BDS). The company estimates that this separation could be completed in the second half of next year, with Evidian going public by the end of 2023.

This plan was recently received by the market, Atos’ share has fallen by about 45% since its introduction.

When asked about the potential approaches of large manufacturers to Atos cybersecurity assets, Nurdin Bikhmane, the company’s managing director, assured that the group “has not received offers to date.” “We have nothing to comment on this issue,” the leader added.

-Julien Marion, Agefi-Dow Jones; +33 (0)1 41 27 47 94; [email protected] edited: DID

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July 27, 2022 02:09 ET (06:09 GMT)