Transcription-replay de la conférence call d’Atos du 5 mars (résultats 2024) + les questions des 2 courtiers présents [Article-Podcast-blog]

 

Version originale d’abord, puis version française en fin d’article.

Vu l’anglais un peu brut de Philippe Salle, je ne vous garantis pas le résultat du transcripteur Python utilisé par le blog, ni de Google translate pour la partie française.

Comme je l’ai déjà dit avec humour, soupoudré d’une pointe de satire, si l’anglais de Philippe Salle était du pinard, on dirait qu’il racle un peu la gorge. Et en effet, tant le décrypteur Phython que Google translate et que Gemini ont vraiment eu toutes les peines du monde avec l’anglais de Philippe Salle. Je crois qu’il faut remonter à Nathalie Sénéchault pour voir Phython s’emmêler de la sorte et même avec Nathalie Sénéchault, notre transcripteur Phyton arrivait s’en sortait au final avec 2/3 corrections manuelles. Là j’ai décroché, je vous laisse la version brute de décoffrage à l’image de l’homme 🙂 .

Je ne reprécise pas que la dircom a une fois de plus, à notre grand plaisir, été bypassé une deuxième fois. Ouf, Enfin ! Certes ça ne va pas ramener un point de MOP qu’ils aient été dégagés, mais ça fera des conneries en moins.

Désole Philippe, mais pour Google-Phyton, vous êtes vraiment le maillon faible. Il faut remonter à 1992 avant l’arrivée de Bernard Bourigeaud à la tête d’Axime pour voir Google Translate peiner comme ça 😀 😀

Pour ceux qui veulent zapper la version originale, scrollez scrollez et constatez pour vous-même.

Version audio :

 

Transcription réalisée par Script Python made in blog Atos.Bourse

VERSION ORIGINALE ANGLAIS

Good morning, everybody. Thank you for joining us this morning for our 24 financial results.
I’m with Jacques-François, the group CFO.

So on page four on the agenda, today I will share with you some key messages. Then I will go on the business highlights.
But on 2024, Jacques-François then will take the lead for the 24 financial results.
And then I will come back with key takeaways. And of course, we’re going to take some Q&A after that.
So with the allies first, so let’s start on the page, which is number six.
Yes. So I would say first on Q4, I think the good news is the, I would say, commercial activity on Q4.
As you can see, the Q4 book to be, in fact, is very strong, above 110 percent and stronger,
in fact, than Q4 2023. We signed, in fact, a lot of multi-year contracts.
It’s both renewals in terms of contracts and wind. In the second point, we have a 2024 revenue organic evolution, operating margin and free cash flow is roughly in light with the outlook that we have communicated in October, which I think is very important in terms of, I would say, confidence.
In terms of M&A update, we finalized the sale of WorldGrid.
It has been done in the year of 2024, and we received the cash, in fact, before the end of the year.
As you know, in November, we received a non-binding offer from the French state for the potential acquisition of what we call the advanced computing activities.
And we have launched the self-process of the Mission Critical System [MCS].
In fact, this month, in March, and we, if we have, I would say, the right level, I would say, of price, we will probably sign something during the summer for a closing probably at the end of the year or beginning of next year.
Finally, I would say, on the right column on the slide, I think it’s very important to understand that we are now opening a new chapter.
First, we have successfully, I would say, closed the financial restructuring. It was done on December the 18th.
Then we had, I would say, a credit rating of a B minus with a stable outlook on our corporate bonds [Ndlr-blog : may toujours CCC sur la dette réaménagée ne l’oublions pas]
And then, of course, there is now, I would say, a transformation plan that is underway.
So, in fact, when I joined the company, I launched in December a strategic review plus a transformation plan.
And, in fact, I will convey a capital market day with Jacques Francois and the top management in May.
It will be on the 14th, where we’re going to, I would say, reveal exactly, I would say, the strategy 25-28 and, of course, a business plan for the next four years, for 25, of course, and then the next four years.
If we go on the page seven on the 2024 financial performance, so first, in terms of sales, we are at 9.6 billion.
It’s roughly organically down by 5%.
We can say roughly that the market was around minus two, so it means that we have suffered a little bit more than the market, around three points.
And, of course, this is, I would say, a normal, I would say, situation with the instability, of course, that was with Atos during the year of 2024.
So, if we are a deep dive, I would say, between the two business units that we have, so Eviden is roughly at minus 7%, and the Tech Foundation around minus four.
In terms of operating margin, around 200 million, which is roughly 2.1% of sales.
It’s, of course, I would say, probably the bottom for us. Surely, I would say the bottom.
I think we’re going to rebound already in 2025.
If we compare, I would say, versus 2023, first, there were some costs, in fact, in 2023 that were put under the OM for the separation.
That is, of course, no longer an option, and it was more, it was a circle of roughly 100 million, and also, we had, we make some provisions.
In fact, in 2024, what we call on the red or black accounts, around 40 million.
The growth-free cash flow is minus 2.2 billion.
You have to understand that we completely stop what we call the working capital optimization, and it has an impact roughly of 1.5 billion, I would say, on the cash.
And we have also higher capex coming from the HPC.
That’s a one-off, I would say.
It’s not going to be repeated, in fact, in 2025, and it was around, I would say, a 200 million plus.
That was, of course, I would say, as affected, I would say, the cash flow of 23.
If I go now on page eight for the, I would say, the order entry and the commercial performance, so it’s roughly 8 billion.
And as I said, 2.7 billion in Q4.

I think we have been, we have been able, I would say, to see a good rebound, I would say, on the Q4 activity.
And also, because most of the clients were waiting, I would say, the end of the financial restructuring.
In fact, we signed a lot of contracts in December.
You have, after that, of course, by business line, Eviden has a book to bill and so, in Q4, at 111% and roughly at 88% during the year of 2024.
And Tech Foundation, the Q4 was at 122%, which is quite a good, I would say, performance.
And a book to bill, it’s a bit below 80% also for the year 2024.
So, I put, I would say, some examples of what we have been able, I would say, to negotiate during the Q4 in banks, in public sector, car rental company, and health insurance.
If we go on the page nine, so the revenues, I would say, by regions, as you can say, we are quite balanced, finally, I would say, between North America, UK, Benelux, what we call Central Europe, includes Germany, Southern Europe, and what we call also growing markets, which is, of course, Latin America, Africa, Middle East, and Asia.
So, let’s deep dive, I would say, let’s say, region by region.
And let’s start with North America.
So, in fact, in North America, the revenue was minus 12%.
It has been, I would say, a difficult environment.
Probably, I would say, for me, I was in the U.S. last week.
I think that a lot of, let’s say, U.S. corporations were more sensitive, I would say, to the financial situation of Atos.
And that’s why we lost some of the, I would say, some contracts in this area.
But the good thing, the good sign that we have in touch is some of them are restarting, I would say, to renegotiate some contracts with us, which I think it’s a good sign, I would say, for 2025.
On page 11, in the UK, also, it has been quite tough, but we’ve also decided, I would say, to stop some contracts.
And remember, also, that we have the BPO activities mainly located in the UK.
And this one, in fact, was a double-digit decline.
Benelux and Nordics on page 12, quite a healthy, I would say, growth at around 5%.
It’s also, I would say, done with, I would say, a good performance with Eviden and, of course, an HPC that was sold in Denmark.
And the Tech Foundation was slightly declining with some contracts of completion.
Central Europe, which includes, I would say, Germany, it’s roughly minus 2%.
We had roughly a small decline for both Eviden and Tech Foundations.
And we have also a scope reduction, in fact, in some sectors.
And you know that, for example, Germany, of course, in the automotive sector is, I would say, suffering quite heavily.
On page 14, South Europe, which is many fronts and, in fact, Spain, we have, I would say, a slight decrease, I would say, compared to, I would say, competitors.
There’s nothing, I would say, to say that, I would say, particularly, I would say, in this region.
And finally, on the growing market, it, of course, it has been, so it’s on page 15, it has been also driven, I would say, by the Olympics,
because the Olympic contracts, I would say, is in this region.
So we have, I would say, a strong growth, I would say, on Tech Foundation because of the Olympics.
And Eviden, we had, I would say, some declines, but it’s also because, I would say, the base is not really comparable with the HPC, as we have done, I would say, quite a good year in 2023.
Now, to finalize, before I give the floor to Jacques Francois, I think the good news is the attrition rate on page 16.
As you can see, it’s around the 15%, so it’s, I would say, compared, I would say, to the normal years for us.
So there was not a lot of leakage, I would say, compared to other  companies in the company.

And, of course, I think it’s a good sign to see that finally, I would say, most of our workforce has been able, I would say, to stay with the company.
And, of course, we are now, I would say, aiming to probably decrease this attrition rate in the future.
The retention of the key employees also is very important at 92%, which, of course, is important as it is the workforce, of course, that is driving the group going forward.
With now, I give the floor to Jacques-François to give you the, I would say, the highlights, of course, of the financial results.
Thank you very much, Philippe, and good morning to you all.
So, our consolidated financial statements have been established, as usual, on a going-concern basis.
All the numbers I will comment upon today are in euros, and I will give you, of course, a snapshot of our key financial numbers for 2024.
So, as Philippe just commented, the group revenue was 9.6 billion euros in 2024, down 5.4 organically compared with 2023, with Eviden down 6.7 percent, and tech foundations declining by 4.1 percent.
Group operating margin was 199 million, representing 2.1 percent of revenue, down 200 basis points organically compared with fiscal year 2023.
Free cash flow was minus 2.2 billion euros for the full year, largely explained by the end of one of working capital optimization actions, which resulted in a 1.5 billion euro decrease compared with December 2023, as well as by higher capex linked to HPC contracts.
The nominal value of our debt, the net debt post-financial restructuring, was 1.2 billion.
As you can see in our accounts, the book value of our debt in IFRS was actually 0.3 billion euro, because it included an IFRS 9 debt fair value treatment, which reduced its value by nearly a billion, 963 million euro, in order to reflect the mark-to-market.

This 963 million will be amortized in subsequent years.

Net loss group share was 0.2 billion euro, primarily reflecting a 2.7 billion euro financial gain related to the financial restructuring of the group, a 1 billion euro income from the IFRS debt fair value treatment, and a goodwill and other current asset impairment charge of 2.4 billion euro.

Let me guide you through our revenue evolution in 2024.

Our revenue evolution is explained by two main drivers.
Firstly, the organic revenue decrease of minus 5.4%, as Philippe just said, driven by previously established contract terminations or scope reductions, as well as market softness in key geographies.
Secondly, of course, the scope changes over the past years, with the divestitures in 23 of UCC, EcoAct, State Street Joint Venture, and to a lesser extent, WorldGrid, at the end of 2024.
The organic revenue evolution percentage is in line with the business outlook we provided in October.
This leads to a full-year revenue of 9.7 billion euro.
Regarding our profitability, the group operating margin was 199 million euro, representing 2.1% of revenue, down 210 basis points compared to 23.
As a general comment, the margin decrease comes mainly from 2.1% of items.
Firstly, the allocation to the business of 103 million euro additional SG&A.
In 23, these internal costs, because they were unusual, abnormal, and infrequent, because they related to the separation project that was conducted at that time, they were classified below the operating margin in the other operating income and expense line of our P&L.
And secondly, circa 40 million euro of provision for underperforming contracts following negotiations with customers.
So now per business line.
Eviden operating margin was 90 million euro, representing 2% of revenue, down 350 basis points.
Beyond the allocation of SG&A costs, representing 48 million euro, profitability was also impacted by revenue decrease and lower utilization of resources.
Tech Foundation’s operating margin was 109 million euro, representing 2.2% of revenue, down by 70 basis points.
The business benefited from the positive impacts from the continued execution of the transformation program and the accelerated reduction of underperforming contracts.
That was offset by higher allocation of SG&A costs to the business for 55 million euro for tech foundations.

I will now walk you through the rest of the P&L.
Non-recurring items were a net expense of 2.9 million euros, and I will comment upon the key elements there.
Firstly, reorganization costs amounted to 119 million euro, a strong reduction compared with the 696 million incurred last year.
Reorganization costs include notably the workforce adaptation measures for 56 million euro compared with 343 million in 2023,
as the group limited restructuring expenses in order to manage its cash position during 2024.
It also includes separation and transformation costs for 42 million, related to the last cost of the legal carve-out, which was launched in 2022 as part of the separation project.
As a reminder, these carve-out costs amounted to 353 million in 2023, about one-third being internal costs, and the rest being mostly external consulting and legal costs.
Secondly, rationalization and associated costs amounted to 37 million euros and corresponded to the continuation of the data center’s consolidation program.
Thirdly, goodwill and other non-current asset impairment charges amounted to 2.4 billion euro.
I’m sure you all know, but just to make things clear, I remind you that this charge is a non-cash item.
Impairment amounted to 1.5 billion euro for the first half of the year and 0.8 billion euro in the second semester,
reflecting the decrease of the group’s enterprise value, which takes into account a lower fair value of the financial debts and a lower market capitalization.
Remaining goodwill on the balance sheet at the end of the year amounted to circa 600 million euro.
Finally, in 2024, other items were a net expense of 288 million euros.
It included 74 million euro of net capital gain related to the sale of WorldGrid, offset by additional losses recognized on past transactions.
It also included the reassessment of onerous contracts that were accounted for in OOI in previous years for 160 million euro, settlements and legal fees related to major litigations for 96 million euro,
current asset write-off for 78 million euro, and net cost of pension and early retirement programs in Germany.
Net financial income amounted to 3.1 billion euro in 2024, compared with a net charge of 227 million euro in 2023.
This increase results from higher interest rates, increased drawings on our SCF, as well as interest paid on the interim financing and on the new debt structure.
Secondly, net financial gain amounted to 3.5 billion euro in 2024.
This topic is so important, we have added a page on the next page to elaborate and explain the financial impact of the debt restructuring.
Let’s go through that.
As you can see on the screen, the 3.5 billion euro is made of four main elements.
The largest one to the left is recognized, is again recognized for 2.8 billion euro upon the conversion of the debt into equity.
Then, there is a 965 million euro income, which was recognized following the fair value treatment applied on our debt, according to IFRS 9.
This amount would be amortized in subsequent years.
An expense of 45 million euro related to the issuance of the warrants was recognized, as well as the cost and fees of the financial restructuring amounting to 165 million euro.
Thirdly, in 2024, other financial expenses amounted to 221 million euro.
It included 78 million euro of exit fees on interim financing loans, a lease liability interest of 36 million, higher than in 2023 due to higher discount rates, pension-related financial expense of 30 million, a net foreign exchange loss, including hedges of 29 million, and prior year transaction costs, which were fully amortized in 2024 in the context of the financial restructuring of the group for 15 million euro.
Thank you.

The tax charge for 2024 was 214 million euros, increasing by 102 million euros compared with 23.
This increase was primarily driven by 59 million euros valuation allowance on DTA recognized in past years, reflecting the latest business plan of the group and reduced taxable income perspective.
And, on top of that, 37 million euros of non-recoverable withholding tax paid on dividend distributions.
Turning now to our free cash flow statement.
Free cash flow was minus 2.2 billion in 2024.
Let me highlight the key elements there.
Firstly, the free cash flow for the year reflects the end of the one-off working capital optimization actions for 1.5 billion euros compared to December 31st, 2023.
Details of these working capital actions will be shown on the next page.
Then, capital expenditures increased by 239 million euros, reflecting increased investments in client projects, particularly for a significant investment in the energy-efficient exascale technology.
So, as we said before, we are no longer doing any one-off actions to optimize our working capital.
The 319 million, you can see here to the right, consists only of customer payments received in advance of the inverse due date.
I insist, we have not given any discount for this cash in advance, nor have we orchestrated it.
This comes purely from large public sector companies, customers in various countries, various industries.
As a reminder, working capital optimization amounted to 1.8 billion euros at the end of December 23.
So, logically, the impact on this year’s cash flow statement was minus 1.5 billion.
Going forward, our intention is to put in place measures to improve our working capital in a sustainable and recurring manner.
The total of reorganization, rationalization, and associated costs, and integration and acquisition costs reached 256 million euros, compared with 660 million euros in 23.
Indeed, the group limited restructuring expense to manage its cash position in 24.
Cash-out related to other changes amounted to 504 million euros.
This amount included costs incurred on onerous contracts for 166 million euros, for the most part in relation to the contracts that were accounted for in other items in previous years.
It also comprised expenses related to financial restructuring for 226 million euros, out of which 110 million of external advisor costs, 38 million of lender fees, and 78 million of exit fees on the interim financing we had in 24.
The litigation costs, including the cash disbursed to settle a major litigation, are also reported on that line.
In conclusion, the group reports a negative free cash flow of minus 2.2 billion in 24, reflecting the end of one-off working capital optimization actions for 1.5 billion euros, and higher capex linked to HPC contracts for 0.2 billion euros.
The net cash impact resulting from net disposals amounted to 162 million euros, mainly relating to the net cash proceeds generated by the world grid disposal for 232 million euros, including fees on disposals.
This also included the write-off of a receivable on a past disposal.
To conclude on the cash flow statement, let me spend a moment on what was the impact of the capital increases of our net debt.
Following the successful closing of our financial restructuring on December 18th, we have restored our liquidity profile and reduced significantly our debt.
This translated into 145 million euros of new money equity raised from the rights issue, as well as 2.9 billion euros of equitization of existing financial debt.
The total net debt for the group amounted to 275 million euros, including 965 million IFRS 9 debt fair value treatment, which will be amortized in subsequent years.
As a reminder, before this IFRS 9 debt fair value treatment, the nominal value of our debt amounted to 1.2 billion euros.
The group did not pay dividends in 24.
The numbers you see on the screen related to the withholding tax paid by certain subsidiaries on internal dividend distribution and dividend paid to minority interest.
To conclude my presentation, I would like to present to you our new financing structure and maturity.
Cash, cash equivalent and short-term financial assets at year-end were 1.8 billion euros, meaning we have sufficient liquidity to operate at mid-term and to execute our business plan.
As a reminder, the 440 million euros of revolving credit facility is undrawn at the end of 24.
Consequently, our gross debt at December 24 is 3.1 billion euros.
You can see on this slide the breakdown between bonds, loans, and RCF.
We have no maturity before December 29, with the first lien debt of 1.8 billion, including the RCF, having a maturity in December 29, the 1.5 lien debt of 1.9 billion in December 30, and the second lien debt of 0.5 billion in December 32.
All these amounts include the debts related to the interest in-kind PIK.

I will now hand over back to Philippe.

Thank you, Jacques-François.
So I think we are now ready for this new chapter for Atos.
Now that I would say the financial restructuring has been completed in December, we can now focus on the transformation journey, which of course is very important.
And the idea, of course, is to provide highest level of support to our customers through innovation and quality.
So first, we have a new governance in place. We have now a combined chairman and CEO role.
And we have a reduced board of eight directors with a strong and recognized domain expertise.
Two, there is a transformation plan in motion.
In fact, I launched early December a strategic review.
And also, there is a launch of a transformation plan during the Q4 last year.
And of course, this will give, of course, a lot of results in the course of 25 and 25.
Three, I think the leader team now is appointed.
The top 20 is almost complete.
And I would say what I call the management team, around 200 people now are ready, I would say, to deliver, I would say, the results we are looking at, of course, for 25 and the next years.
And finally, as I say, there was a strong commercial activity in Q4.
And we, I would say, quite confident also that we will continue to have some good results in the course of 25.
So, as I say in my introduction, I will give, I will give you, I would say, we will meet you, I would say, on the 14th of May in France, in Paris.
We don’t know exactly where is the venue, but we will, of course, come back to you and, of course, the timing.
I will present, of course, with Jacques Francois and some of the top management, my vision, Faratos, for the 25-28 plan, so it’s a four-year plan.
Of course, this year plus the next three years, we will give also guidance for 25 and we will also give a guidance for 28.
With this operator, we can start the Q&A session.
Thank you.

OPERATOR
We will now take the first question.
From the line of Frédéric Boulin from Bank of America, please go ahead.

Hey, good morning, Philippe and Jacques-Francois.
Thanks for the presentation.
A couple of questions for me.
First of all, in Q4, if you can give us any sense of when you look at the operating performance of Avid and Tech Foundation, what was the impact of contract termination within the kind of organic revenue decline?
Specifically, you point out to some HPC delivery in Denmark and Germany.
It would be great here if you could also give a bit of quantification around the positive impact around those.
And then more broadly, when we look at the trajectory in the next couple of years, I mean, the pre-restructuring, you had this kind of very useful flow chart to kind of paint the picture of where you plan to be in the medium term in terms of leverage, cash flow, et cetera.
So I understand you will give us all that detail on the 14th of May.
But it would be interesting to understand, at least for 25, any thoughts you have around free cash flow, any specific elements you want to call out.
I mean, you mentioned margin should probably not, you know, worsen further.
But, you know, anything else you can say in terms of where we’re trending versus the previous plan and what you’ve presented to debt holders versus the kind of current leverage target.
I think you had the target of $1.7 billion pro forma debt at 2027.
So any kind of call you can give on that would be great.
Thank you.

Thank you. So, probably on the second, I will let Jacques-François answer on the first two questions, but I would say on the, as I say, I’m not going to give any guidance. You can try, you can understand this, it’s normal, but I will wait, I would say, May to, I would say, give, as I said, the guidance for 25, with a business plan, of course, for 28.
You said that, I think, the lowest point in terms of margin and profitability, I think operating margin was touched in 24. So, for sure, we’re going to do much better, I would say, in 25. But I would say, except this one, I’m not going to come at more than that, unfortunately.
So, you need to be a little bit patient. May the 14th is in two months. You will have, I would say, a full view of where we think we can land, in fact, in 25. And where we’re going to head, I would say, for the next four years, in terms of strategy and also in terms of financial results.

Jacques-François, you want to comment on this?
Yes, Frédéric, I would say, regarding the top line, maybe a word of the Q4, which is a quarter of contrast, because on one hand, as you pointed out, the revenue evolution was degraded due to the contract terminations or the scope reductions, both in Tech Foundation and Evident, but more in Evident than the Tech Foundation.
Although, on the other hand, we have seen a rebound on the commercial activity with a very significant level of order entry.
If I look at the period between the 19th of December and the 31st of December, so that’s the last two weeks of December, we have signed a deal for 1.6 billion only.
So that makes our book-to-bill, you know, of 117% for the Q4, which is, we believe, a regain of momentum regarding the commercial activity.
Anything you can share around the impact of HPC?
Can you elaborate a bit on the question?
Yeah, you said in Denmark and Germany, you had some large delivery that helped in the quarter, so that’s great, but it would be interesting to understand, you know, what’s the kind of scope of those wins?
Yes, I mean, we have, on the Denmark, I think we made a press release explaining a big HPC deal in the course of 24, and on Germany, this is the very big exhaust case.
I think the first European exhaust case, which is the Yudish project, which is still, you know, being developed, for which there was a high capex in 24, and there will be still news on this project in 25.

Okay, thank you.

OPERATOR.
We will now take the next question from the line of Laurent Daure from Kepler-Cheuvreux.
Please go ahead.

Yes, good morning, Philippe, Jacques-François.
I have two questions.
The first is on the contracts termination. Could we have an idea of the impact it could have on 2025 versus the revenues you generated in 2024 to have the full year impact would be useful?
And I was also wondering within the large customer, in the next two years, do you see additional risk of losing further business, or do you think the situation has now stabilized?
And my second question is for you, Philippe, more precisely, you’ve been in a group now for a few months.
What’s going to be your main challenge in the next two to three years compared to your initial expectations?
Thank you.

Okay.
I will take part of the first one and the second one, of course.
We don’t expect, there is only one client at risk in the US, but in fact, we’re not going to lose him.
I had some news yesterday night.
We will probably reduce the scope, but we’re not going to lose the client finally.
So we don’t expect, in fact, any loss, at least in each one for the moment, I would say, from the tender that we have right now.
We have, I would say, probably more good news than bad news, I would say, versus 24.
So I’m quite confident, in fact, that 25, I would say, we’re not going to lose that much contracts versus, of course, what happened during the year of 2024.
Now, to the expectations, I think it’s important, cash is king for me.
So I think I said to the team that it’s important that I would say cash is freedom.
It gives, of course, the possibility for us, I would say, to decide on our own future.
So we’re going to have this exercise, I would say, to make the sales growing back to, I would say, a positive territory, which I think is very important for me.
And that’s why I’m pushing very hard right now on the sales team.
And we have a CLED chief gross officer, I would say, with all the GOs that is on the job.
And this, I would say, of course, is to make sure we’re going to be, I would say, to have a rebound, in fact, starting in 26.
And then the second one, of course, is to adapt the cost versus, I would say, the size of the company to make sure, of course, that we have, I would say, a normal profitability versus our peers.
So it’s, of course, on the short term, for me, I would say it’s more important, of course, to shave costs and make sure, I would say, we deliver free cash flow.
And we will be a positive free cash flow starting in 26.
And exactly the plan, in fact, that we issued in September was, I would say, showing, I would say, positive free cash flow starting in 26.
And I definitely think it will be the case.
And after that, of course, it’s a combination between, of course, growth and, I would say, profitability.
So that’s really what I’m looking at.
Usually, the way I manage the company, it’s always a vision, organization, people and transformation plan.
So we launched the vision, it will be, and it will be finished by April.
The transformation plan has been launched also in Q4.
In fact, there was already a start of a transaction plan before I arrived and then I accelerated it and you will show it, I will show it, in fact, in May.
The organization is in place.
It has been communicated internally.
We have number of people.
The top 20 is in place also, like the top 200.
So now we are in the, I would say, finishing the strategy and starting what I call, I would say, the executing mode, which is, in fact, will be starting in April.
So for the first question, which was on the top line, I think, Jacques-François, I’ll let you answer.
Yes.
I mean, Philippe said earlier that we are not going to give a precise guidance for 25 today because there is this meeting point in May at the CMD.
However, logically, what I can say, you see on our press release and you will see in our accounts that, indeed, the Q4 numbers, it’s a reduction in revenue versus the prior year, let’s say, of 300 million in total, which is 150 for, evident, 150 for tech foundations.
So logically, the full year impact will keep going for the coming quarters.
This being said, for the purposes and because this is what we believe for the purposes of issuing and completing these accounts for fiscal year 24, we have confirmed and we do confirm our view for the cash level and the operating margin level in the assumptions of the business plan, which was used for the accelerated safeguard proceedings, which still gives you an idea of the bottom line.
And maybe if I think it’s very important to understand we are cash focused now, I think it’s more important than the rest.
So, of course, the business plan of September gives, I would say, a negative cash flow this year because of the restructuring plan.
We are also continuing and accelerating, in fact.
But I would say that, of course, we take this as a challenge and we will try to probably do better.
And on the client side, I mean, you still have Siemens, I guess, as your largest client.
I’m just wondering if what happened in the last capital quarters may have an impact when you have to renew some pieces of the contract.
Well, I had a longer discussion, in fact, with the CEO.
So I would say we are, I would say, in contact.
There is no, I know that there was a paper saying that we’re going to lose anything from Siemens.
This is not the case.
So we continue, I would say, to have healthy relations.
I will be also in Germany, probably in April.
And, in fact, there is a contract in place still for the next two or three years.
So we are, I would say, fulfilling completely, I would say, the contract.
Okay, great.
Thank you.

OPERATOR

We will now take the next question.

The next question comes from the hand of Adam McGeary from Bank of America.
Please go ahead.
Good morning, and thanks for taking my question.
I wanted to ask if you could give some comparison on the one-off items in the free cash flow compared to what was guided in the safeguard plan.
I mean, if I look at re-org rationalization and one-offs, it seems like sort of I add up to 757 compared to around the 600 million figure in the business plan.
Is there any timing difference here?
Do you expect the kind of total numbers for the year to stay the same as what was previously guided?
Or any comments would be helpful as to how these numbers compare to the previous plan?
So I will let Jacques-François comment.
In fact, in the business plan for 25, it was roughly in the range of 400 million. We expect roughly to be there.
I will try probably to accelerate a little bit, probably the restructuring plan for 25, just because I want to make sure we’re going to hit the numbers also in 26.
But I would say, let’s say, to be in the range of 400 million, a little bit probably above, it’s possible.
But I would say that it’s not going to be a big change versus the business plan we had in September.

Now, for 24, I let Jacques-François answer.

JF DE PREST

Yes.
Thank you, Philippe.

So, Adam, if you look at it facially, the business plan, which we have been using for the last month, was without this working capital optimization actions.
So that’s the main big, big difference.
Once you neutralize that, we’re actually quite close from what was guided and better off, actually.
So the underlying cash flow generation or consumption, rather, was 783 for 24.
And it comes out that we end up the year at 735.
So obviously, there are variations line by line. And I won’t bore you with the details line by line.
But basically, we have a positive impact of working capital.
And we have no, how can I say, if underlying your question is the fact of whether we will
be worse off in 25 because we have been better off in 24, that’s not the case.
So it’s comparable.
There is nothing which has been pushed down further to 25.
And we start the year, I can say, completely clean in terms of cutoff and items in 24 versus 25.

Does that answer your question, Adam?
Yeah, that’s great. Thank you very much.

And then one more question, if I could, please.
Just on the evident Q4 book to bill, 111%, you mentioned some of these are multi-year contracts.
Is there any chance you can give some guidance as to what the average contract length is in that Q4 book to bill number?
It’s difficult. You know what?
Usually, the large deal is around four years. I would say there is above $30 million per year.
The length is around four to five years.
On average, I would say for Atos, it’s true for Eviden, and so it will be probably longer for TechF.
After that, for the small deal, it’s difficult usually.
It’s less than one year.
So within the evident number, even within the evident number, excluding TechFoundation, there will be several multi-year contracts?
Exactly. Yes.
And then when you calculate this book to bill ratio, is that all just on an annualized booking number?
How do you then compare it to revenues in the quarter?
Yes. Yes, yes.
This is on an annualized basis ?

Yes.

Okay. Great. Perfect.
That’s it for myself.
Thank you.

Thank you.
There are no further questions at this time.
I would like to hand back over to the speakers for closing remarks.
Okay.
Thank you again, everybody, for this time.
You can still ask a question if you want.
I think it’s very important to say that 24 is over.
I think it has been, of course, a very painful year for the company.
We have a lot of ups and downs, I would say, news and counter news and whatever.
I think now we are back to a normal company with a level of debt that is, I think, decent.
Of course, we will, let’s say, make the leverage will decrease now.
That’s, of course, our goal.
And it will decrease, in fact, already starting in 25.
And, of course, much more, I would say, in the coming years.
As I say, the team is ready.
The strategy will be almost finished.
I had a board yesterday, in fact, where we had a long-year presentation.
And the transformation plan is in place.
And it’s going to yield, in fact, some results, of course, I would say, as early, of course, as 25.
So I’m quite confident.
I think we have a very strong company.
If I can say, I would say, when I joined the company roughly five months ago, for me, the strength of this company is the client base.
That is, I would say, unbelievable.
I’ve been already touring Asia, in fact, Europe, of course, and U.S.
And I’ve seen a lot of clients.
So I think I’m quite confident that now these clients want, I would say, Atos to be back.
And I would say, of course, we have a strong, also, workforce that was a patient that has a lot of skills.
I think we are probably sometimes over-delivering, which I think is great in terms of quality, which I think it’s a good sign.
And definitely, I think it gives, I would say, quite a good path for the future.
So I quite confident, I would say, on the remand of Atos, it will be the revival of this very nice company.
And as I say, I will give you more flavor, of course, of what we’re going to do in the coming year, in May.
I don’t know if there are any, operator, any other questions or remarks from anybody?
As a reminder, it’s star 1-1, but there’s no questions at this time.
Okay.
Then thank you again for your time, attention.
Have a good day.
And I will see, of course, first, I think there will be the Q1 results by the end of April.
And then I will see all of you, I hope, in May in Paris.
Have a good day.
Bye-bye.

La question suivante vient de la part d’Adam McGeary de Bank of America. [Ndrl-blog : 2 analyses du même courtier, ça fait désordre. Frédéric Boulan va peut-être see faire virer et on lui a pas encore dit 😀 ]

Bonjour, et merci de prendre ma question.

Je voulais demander si vous pouviez donner quelques éléments de comparaison sur les éléments exceptionnels du flux de trésorerie disponible par rapport à ce qui était prévu dans le plan de sauvegarde.

Je veux dire, si je regarde les coûts de réorganisation, de rationalisation et les éléments exceptionnels, il semble que le total s’élève à 757 millions par rapport au chiffre d’environ 600 millions dans le plan d’affaires.

Y a-t-il une différence de calendrier ici ?

Vous attendez-vous à ce que les chiffres totaux de l’année restent les mêmes que ce qui était prévu précédemment ?

Ou tout commentaire serait utile pour savoir comment ces chiffres se comparent au plan précédent ?

Je vais laisser Jacques-François commenter.

En fait, dans le plan d’affaires pour 2025, le montant était d’environ 400 millions.

Nous prévoyons d’être à peu près dans cette fourchette.

Je vais probablement essayer d’accélérer un peu, probablement le plan de restructuration pour 2025, juste parce que je veux m’assurer que nous atteindrons les chiffres également en 2026.

Mais je dirais, disons, d’être dans la fourchette de 400 millions, un peu probablement au-dessus, c’est possible.

Mais je dirais que ce ne sera pas un grand changement par rapport au plan d’affaires que nous avions en septembre.

Maintenant, pour 2024, je laisse Jacques-François répondre.

Oui.

Merci, Philippe.

Donc, Adam, si vous regardez cela de manière factuelle, le plan d’affaires, que nous avons utilisé le mois dernier, était sans ces actions d’optimisation du besoin en fonds de roulement.

C’est donc la principale différence.

Une fois que vous neutralisez cela, nous sommes en fait assez proches de ce qui était prévu et même mieux, en fait.

Donc, la génération ou la consommation de flux de trésorerie sous-jacente, plutôt, était de 783 millions pour 2024.

Et il s’avère que nous terminons l’année à 735 millions.

Il y a donc évidemment des variations ligne par ligne. Et je ne vais pas vous ennuyer avec les détails ligne par ligne.

Mais en gros, nous avons un impact positif du besoin en fonds de roulement.

Et nous n’avons pas, comment dire, si votre question sous-jacente est de savoir si nous serons plus mal lotis en 2025 parce que nous avons été mieux lotis en 2024, ce n’est pas le cas.

Donc, c’est comparable. Rien n’a été repoussé à 2025.

Et nous commençons l’année, je peux le dire, complètement propres en termes de coupure et d’éléments en 2024 par rapport à 2025. »