Adjustment of annual objectives
Confirmation of medium-term objectives
Paris, July 12, 2021 – Referring to EU regulation n ° 596/2014, which stipulates that issuers must inform the public as soon as possible of inside information that concerns them directly, Atos announces the adjustment of its annual targets for 2021. The figures for the first half of the year do not are not finalized or audited, the detailed accounts for the first half of the year will be published as planned on July 28, 2021.
During the second quarter, constant currency revenue growth returned to stability. However, organic growth remained negative at c. -1.5% due to an accelerated decline in legacy infrastructure business amid much higher demand for post-COVID cloud migration. The Group anticipates that this change in activity will last during the second half of the year. The Group’s other activities benefited from the economic recovery resulting in booming digital demand. In this context, the Group is adjusting its revenue growth target at constant exchange rates over the full year to stable.
Although for this year the Group anticipated a higher seasonality between the first and the second semester, the operating margin was lower than expected in the first semester at c. 5.5%. Taking into account the adjustment in turnover over the whole year, impacting historical activities with low flexibility in short-term costs, the Group adjusts its operating margin target at c. 6.0% for the whole year. As a result of this unprecedented impact on activity, several exceptional items (asset depreciation, provisions for losses) were recognized under “Other operating income and expenses”. This line amounted to a total of c. -160 million euros in the first half.
In the first half of the year, free cash flow amounted to approx. -364 million euros compared to -172 million euros in the first half of 2020. Free cash flow was mainly impacted by the working capital requirement and in particular by a decrease in cash advances from customers. In the future, the Group decides to reduce cash advances from customers. The adjusted target for 2021 is positive free cash flow, to reflect the impact of the drop in the target operating margin and working capital, more particularly on customer down payments. The new target also assumes the full one-time cash outflow of 180 million euros in 2021 for the German recovery plan (see below).
Transformation agenda and medium-term objectives
In this context, the Group has decided to accelerate its transformation – both organic and inorganic – by expanding its achievements and focusing on Digital, Cloud, Security and Decarbonization.
In particular, the strategic review of the portfolio of non-strategic assets is being finalized and the Group will communicate its conclusions on July 28, 2021, in order to move quickly to execution.
Negotiations with the social partners regarding the necessary recovery of German infrastructure activities resulted in a restructuring plan of c. 1,300 people, providing 1% additional operating margin at Group level in the medium term. The plan will be detailed on July 28, 2021.
After a year of transition in 2021, the Group plans to improve all its KPIs in 2022 and maintains its medium-term objectives of revenue growth at constant exchange rates of + 5% to + 7%, margin rate operational from 11% to 12% and free cash flow conversion greater than 60%.
Follow-up of audits in North America
Regarding the audit of American legal entities, the Group decided in April of this year to carry out a complete accounting review of these entities as of December 31, 2020, supported by external advisers.
This work is being finalized and at this stage the anomalies identified are not significant. The work of the statutory auditors is also continuing as part of their half-yearly review.
The completion of this process is expected to be reached at the time of the publication of the first semester on July 28, 2021.
In addition, the remediation and prevention plan has been finalized and is being rolled out.
(July 12, 2021)
(February 18, 2021)
|Revenue growth at constant exchange rates||Stable||3.5% to 4.5%|
|% Operating margin on sales||vs. 6.0%||9.4% to 9.8%|
|Free movement of capital||Positive||550 to 600 million euros|
Atos Management invites you to an international conference call, Monday July 12, 2021 at 8:00 a.m. (CET – Paris).
You can join the webcast of the conference:
- via the following link: https://edge.media-server.com/mmc/p/cvgjqzz9
- by phone with dial-in, 10 minutes before the start time. Please note that if you would like to join the webcast by phone, you must register before the conference using the following link: http://emea.directeventreg.com/registration/9249267
When registering, you will receive the call numbers of participants, a direct access code to the event and a unique holder identifier. During the 10 minutes prior to the start of the call, you will need to use the conference access information provided in the email received during registration.
After the conference, a replay of the webcast will be available on atos.net, in the Investors section.
The press release will be published on Monday July 12, 2021 at 7:30 a.m. (CET – Paris).
Events to come
July 28, 2021 Results for the first half of 2021
October 21, 2021 Third quarter 2021 revenue
Gilles Arditti – +33 6 11 69 81 74 – [email protected]t
Anette Rey – +33 6 69798488 – [email protected]
Atos is a global leader in digital transformation with 105,000 employees and annual revenue of over 11 billion euros. European leader in cybersecurity, cloud and high performance computing, the Group offers tailor-made end-to-end solutions for all industries in 71 countries. A pioneer in decarbonization services and products, Atos is committed to secure and carbon-free digital for its customers. Atos operates under the Atos and Atos | Syntel brands. Atos is an SE (Societas Europaea), listed on the CAC40 Paris stock market index.
the Atos goal is to help shape the future of the information space. Its expertise and services support the development of knowledge, teaching and research in a multicultural approach and contribute to the development of scientific and technological excellence. All over the world, the Group enables its customers and employees, as well as members of companies in general, to live, work and develop in a sustainable manner, in a safe and secure information space.
This document contains forward-looking statements that involve risks and uncertainties, including references, regarding the expected growth and profitability of the Group in the future which may have a significant impact on the expected performance indicated in the forward-looking statements. These risks and uncertainties are linked to factors beyond the control of the Company and not precisely estimated, such as market conditions or the behavior of competitors. All forward-looking statements contained in this document are statements regarding Atos’ beliefs and expectations and should be evaluated as such. Forward-looking statements include statements that may relate to plans, objectives, strategies, goals, future events, future revenues or synergies, or performance of Atos, 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 which are described in the 2020 Universal Registration Document filed with the Autorité des Marchés Financiers (AMF) on April 7, 2021 under the registration number D. 21-0269. Atos does not undertake, and specifically disclaims, any obligation or liability to update or modify the above information, except as required by law otherwise. This document does not contain or constitute an offer to sell Atos shares or an invitation or inducement to invest in Atos shares in France, the United States of America or any other jurisdiction.
Atos’ consolidated and statutory accounts for the year ended December 31, 2020 were approved by the Board of Directors on February 17, 2021. Following their audit procedures on the consolidated accounts for the year ended December 31, 2020 December 2020, the statutory auditors issued a qualified opinion on April 1, 2021 due to a limitation in the scope of the audit as two American legal entities representing 11% of 2020 consolidated sales requiring additional due diligence . For the sake of clarity, with the exception of the reservation appearing in the Statutory Auditors ‘report on the consolidated accounts for the year ended December 31, 2020, the Group’s consolidated accounts are audited and the accounts included in the Document d’. universal registration are unchanged. compared to the version published by the Company on February 18, 2021. To date, the Group has not identified any anomalies on the two American entities that are significant for the consolidated financial statements.
Organic revenue growth is presented at constant scope and exchange rates.
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