Atos reports full year 2023 results
Atos reports full year 2023
results
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
organicallyWith year-on-year improvements in both Eviden and Tech
FoundationsFree cash flow at €-1,078mH2 Free Cash Flow at
€-109mReflecting lower working capital actions and higher
reorganization costs
Net loss group share at €-3,441m Impacted by
goodwill and other non-current assets impairment charge of
€2,546m
Normalized net income at €73m vs €-28m in
2022
Full year book-to-bill ratio at 94%, up +4 pts vs
last yearQ4 book-to-bill at 108%
Opening of an amicable conciliation procedure, in
the continuity of the ad hoc mandate,aiming at reaching a
refinancing plan with Atos’ financial creditors
Favorable court decision for Atosvacating
entirely the compensatory award related to TriZetto
Paris,
March 26 2024 - Atos, a global leader in digital
transformation, high-performance computing and information
technology infrastructure, today announces its FY 2023 results.
Atos’ Chief Executive Officer, Paul
Saleh declared: “In 2023, we achieved our revenue and
profitability guidance in a challenging environment and while we
were executing the separation of the company into two businesses,
Tech Foundations and Eviden.
We reported organic growth at Eviden as the
company continues to invest in its offering. The business expanded
its leadership in generative AI and application management,
securing its customer base with significant renewals and new
business particularly in Manufacturing, Consumer Goods and Public
Sector verticals in Europe. Eviden has also been awarded the first
exascale supercomputer in Europe, a state-of-the-art machine that
will allow the acceleration of European scientific research and
innovation.
In Tech Foundations, the business is executing
on its transformation plan with a strong renewal rate with existing
clients and contracts signature with new logos in both Digital
Workplace and Hybrid Infrastructure including mainframe management,
highlighting the relevance of our offerings and the quality of our
service delivery.
Our operating margin has improved year over
year, reflecting the execution of our cost improvement plans, while
our cash flow was impacted by workforce optimization, separation
costs and lower working capital actions.
Discussions regarding the potential sale of Tech
Foundations to EPEI have concluded with no deal reached. We 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. We have been informed as well by
Airbus that discussions related to the sale of Eviden’s BDS (Big
Data & Security) division will not proceed and we are therefore
actively evaluating strategic alternative options that are in the
best interest of our customers, employees, creditors and
shareholders, taking into consideration the sovereign imperatives
of the French state.
We are also in discussions with our financial
creditors with a view to reaching a refinancing plan by July within
the framework of an amicable conciliation procedure that is part of
the mandat ad hoc procedure initiated last February.
Our colleagues around the world work with dedication and passion
to serve our clients with the highest quality. I thank them
deeply for their daily commitment and energy in this evolving
environment. To our loyal and trusting clients and partners who
stand side-by-side with Atos during this period, on behalf of our
95,000 employees, I say thank you for your unwavering support.”
Basis of preparation of the 2023
consolidated financial statement
The consolidated financial statements of the
Company for the year ended December 31, 2023 have been prepared on
a going concern basis.
Atos SE wishes to draw attention to the maturity
of its borrowings and the risks associated with its refinancing and
its liquidity. Please refer to section “Refinancing discussions and
liquidity” of this press release for further details on
liquidity.
2023 performance highlights
In € million |
2023 |
2022 |
Var. |
|
2022* |
Organic Var. |
Revenue |
10,693 |
11,270 |
-5.1% |
|
10,648 |
0.4% |
Operating Margin |
467 |
356 |
111 |
|
289 |
178 |
In % of revenue |
4.4% |
3.2% |
+120 bps |
|
2.7% |
+170 bps |
OMDA |
1,026 |
1,020 |
6 |
|
|
|
In % of revenue |
9.6% |
9.1% |
- |
|
|
|
Normalized Net income (loss) |
73 |
-28 |
101 |
|
|
|
Net loss |
-3,441 |
-1,012 |
-2,429 |
|
|
|
Free Cash Flow |
-1,078 |
-187 |
-891 |
|
|
|
Net (debt) |
-2,230 |
-1,450 |
-780 |
|
|
|
*: at constant scope and average exchange
rates
Revenue and operating margin by Businesses
In € million |
2023Revenue |
2022revenue |
2022revenue* |
Organic variation* |
Eviden |
5 089 |
5 244 |
4 945 |
+2,9% |
Tech Foundations |
5 604 |
6 026 |
5 703 |
-1,7% |
Total |
10 693 |
11 270 |
10 648 |
+0,4% |
In € million |
2023Operating margin |
2022 Operating margin |
2022Operating margin* |
|
2023Operating margin % |
2022 Operating margin% |
2022 Operating margin%* |
Organic variation |
Eviden |
294 |
276 |
233 |
|
5.8% |
5.3% |
4.7% |
+110 bps |
Tech Foundations |
172 |
79 |
56 |
|
3.1% |
1.3% |
1.0% |
+210 bps |
Total |
467 |
356 |
289 |
|
4.4% |
3.2% |
2.7% |
+170 bps |
*: at constant scope and average exchange
rates
Group revenue was €10,693
million in 2023, up +0.4% organically compared with 2022.
Eviden delivered a +2.9%
organic growth.
- Big
Data & Security (BDS) grew by mid-single digit, driven
by stronger demand in Mission Critical Systems and High-Performance
Computing (“HPC”), with a large system in Spain and the ramp-up of
a new contract signed in India.
-
Digital activities grew low-single digit
reflecting strong revenue growth in Europe, driven by demand for
specialized application development, application management and
next-generation products and services, which was partially impacted
by a general market slowdown in the US, as clients take longer to
award new business.
Tech Foundations recorded a
-1.7% organic decline in revenue.
- This reflects
the deliberate reduction in non-core activities,
including the sale of its Italian and UCC businesses and a -19%
decrease of hardware and software resale. BPO activities were up
year on year, due to a favorable comparison effect.
- The decline in
core revenue was successfully contained to -2.0%.
Growth in Digital Workplace and Technological Services helped to
partially offset the structural decline of the Hybrid Cloud &
Infrastructure market.
Group operating margin was €467
million representing 4.4% of revenue, up +170 basis points
organically compared with 2022. Both businesses contributed to this
improvement:
- Eviden’s operating
margin was €294 million or 5.8%, up +110 basis points organically.
Eviden’s operating margin improved as a result of cost take-out
actions, better utilization of billable resources and higher
absorption of fixed costs in advanced computing.
- Tech Foundations
operating margin was €172 million or 3.1%, up +210 basis points
organically. The business benefitted from the execution of the
transformation program that started in 2022, including the shift of
the business portfolio towards higher margin new offerings. There
was also a positive impact from the accelerated reduction of
under-performing contracts via renegotiation and improved delivery,
better pricing of new businesses and continued reduction of low
margin non-core activities such as resale.
Order entry and backlog
Full-year 2023 commercial activity
Order entry reached €10.1
billion during the year, representing a book-to-bill ratio of 94%,
up +4 points compared with 2022.
Eviden reported a book-to-bill
ratio of 94% for the full year. Order entry reflects ongoing
digital activities from smaller, low-risk contracts and short-term
bookings with faster revenue yields. In terms of new deals
concluded during the year, Eviden signed generative AI contracts
with large clients in the retail and technology sectors. In
addition, Eviden signed a large HPC deal in India and the very
first exascale supercomputer contract in Europe, a key milestone
that will extend Europe’s scientific excellence and industrial
leadership.
Tech Foundations’ reported a
book-to-bill ratio of 94% led by the successful renewals of major
Digital Workplace and Hybrid Infrastructure contracts in nearly all
geographies with particular strength in North America and by the
renewal of Technology Services contracts in France. The number of
new signatures more than doubled compared with 2022 with eleven new
large deals.
Q4 2023 commercial activity
Book-to-bill ratio for the Group was 108% in
Q4.
At Eviden, Q4 book-to-bill reached 100%. Main
contracts awarded consisted of the extension of the HPC contract in
Germany, a new HPC contract for a French public entity and a new
Public Sector contract in the United Kingdom. An application
maintenance contract with a leading US financial rating agency was
also successfully renewed.
At Tech Foundations, Q4 book-to-bill was 117%.
Main order entry in Tech Foundations included the extension of
infrastructure management services with a leading Asian bank, a new
Digital Workplace contract with a major European Telecom company
and an extension of a mainframe management contract for a large US
insurer.
Backlog & commercial pipeline
At the end of December 2023, the full
backlog reached €18.5 billion representing 1.7 years of
revenue. The full qualified pipeline amounted to
€6.2 billion at the end of December 2023.
Net income
Net loss group share was
€-3,441 million, primarily impacted by a €-2,546 million impairment
charge.
Normalized net income stood at
€73 million compared with a loss of €-28 million in 2022.
Free cash flow
Free cash flow was €-1,078
million for the full year, reflecting €377 million higher
restructuring and separation costs, and €502 million lower working
capital actions compared with the prior year.
Opening of an amicable conciliation
procedure aiming at renegotiating Atos S.E.’ debt with its
financial creditors
Atos SE announces today that the Company has
entered into an amicable conciliation1 procedure. According to
French law, a conciliation procedure lasts four months, which may
be extended by one month; Maître Hélène Bourbouloux of FHB SELARL
was appointed as conciliator.
The purpose of this procedure is to facilitate a
global refinancing agreement with the banks and bondholders of Atos
SE’s (the “financial creditors”).
The conciliation procedure concerns only the
financial indebtedness of Atos SE and will not impact suppliers,
employees, the governance of the Company, or other creditors of the
Company or its subsidiaries.
The Company intends to present the parameters of
its refinancing framework to its financial creditors during the
week of April 8th, 2024 and to provide an update to the market. The
Company’s objective is to reach a global agreement on the capital
structure of the Company by July 2024.
End of exclusive negotiations with EPEI
for the sale of Tech Foundations
Exclusive negotiations with EP Equity Investment
(“EPEI”) for the potential sale of Tech Foundations announced on
August 1, 2023, did not lead to a mutually satisfactory agreement.
The discussions and the put agreement were therefore terminated by
mutual consent on February 27, 2024, 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.
End of the discussions with Airbus regarding BDS
potential sale
On March 18, 2024, Atos was informed by Airbus
that discussions related to the sale of its BDS (Big Data &
Security) business will not proceed.
Atos is analysing the resulting situation and
actively evaluating strategic alternatives that will take into
consideration the sovereign imperatives of the French state and
will be in the best interest of its customers, employees, creditors
and shareholders.
Favorable court decision for Atos in
appeal against TriZetto damages ruling
On March 13, 2024, the United States District
Court for the Southern District of New York, as part of Syntel’s
ongoing litigation with Cognizant and its subsidiary TriZetto,
vacated the remaining compensatory damages judgments entered in
this case : (1) the $142 million New York trade secret
misappropriation award and (2) the $59 million copyright
infringement award. Therefore no compensatory damage will have to
be paid by Atos. The District Court granted TriZetto’s motion for
attorney’s fees in the amount of approximately $15 million.
The case began in 2015, before Syntel’s
acquisition by Atos. Throughout the trial and on appeal, Atos
maintained that Cognizant and TriZetto had failed to meet their
burden to show trade secret misappropriation and that their damages
theories were improper as a matter of law.
In its decision, the District Circuit,
acknowledged that “the jury’s award was based on what now turns out
to be legal error” and held that “the Court is compelled to vacate
the jury’s remaining compensatory damages awards”.
Asset sales
The Group completed its €700 million program
announced in 2022 and is executing on its additional asset disposal
plan of €400 million mentioned in the press release of July 28,
2023. During 2023, the Group has generated net proceeds from asset
disposal of €411 million, of which €190 million in H1 and €221
million in H2.
Net debt and debt covenant
At December 31, 2023, net debt was €2,230
million and consisted of:
- Cash, cash equivalents and
short-term financial assets for €2,423 million, including benefits
from working capital actions.
- Total borrowings for €4,654
million
The Group remained within its borrowing covenant
applicable to its bank 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.
Refinancing discussions and
liquidity
The consolidated financial statements of the
Group for the year ended December 31, 2023 have been prepared on a
going concern basis. The Group’s cash forecasts for the twelve
months following the approval of the 2023 consolidated financial
statements by the Board of Directors, result in a cash situation
that meets its liquidity needs over that period.
The cash forecasts, which take into account the
latest business forecasts, have been prepared in particular based
on the following assumptions:
- The
implementation of specific actions to optimize its working capital
requirements, including in particular the continued access to a
factoring program,
- The
continuation of the €400 million asset divestment program that was
announced on July 28th, 2023,
- The
implementation of a new disposal program announced on January 3,
2024. In this respect, the Group is actively evaluating strategic
alternatives, having received several expressions of interest or
indicative offers relating to various perimeters.
At December 31, 2023, cash, cash equivalents,
and short term financial assets of the Group amounted to €2,423
million, including the benefits of working capital actions.
Borrowings amounted to €4,654 million, of which €2,400 million of
bonds and €2,080 million of bank financing. As a result, the total
net debt for the Group amounted to €2,230 million at December 31,
2023. In addition, the Atos SE’s leverage ratio applicable to the
multi-currency revolving credit facility and the term loan A
amounted to 3.34x at December 31, 2023.
Atos SE wishes to draw attention to the maturity
of Atos SE’s borrowings and the risks associated with its
refinancing. The coming maturities of its borrowings are as
follows:
- The €1.5
billion term loan A, maturing in July 2024, provides for another
6-month extension option until January 2025 available to Atos under
standard conditions (notably no event of default and payment of an
extension fee); it should be noted that there is no ongoing event
of default, since under French law, events of default linked to the
appointment of a mandataire ad hoc or the opening of a conciliation
procedure are considered void;
- The €500
million bond (Optional Exchangeable Bond) maturing in November
2024,
- The €750
million bond maturing in May 2025,
- The €900
million revolving credit facility maturing in November 2025,
- The €350
million bond maturing in November 2028, and
- The €800
million bond (Sustainability-Linked Bond) maturing in November
2029.
As stated in the January 3rd, 2024 Market Update
press release, the Group will need to take the following actions,
either individually or in combination, in order to meet these
financing maturities:
- Obtain new
bank financing,
- Access
capital markets (debt and/or equity),
- Implement a
major asset disposal program in addition to the €400 million
disposal program announced on July 28, 2023, and
- Continue
specific actions to optimize its working capital requirement,
including continued access to a factoring program.
In this context and as indicated above following
its press release of February 5, 2024, Atos SE has entered into
discussions with its banks and bondholders with a view to reaching
a global agreement on the restructuring of its financial debt.
Those discussions, that were held with the participation of the
CIRI (“Comité Interministériel de Restructuration Industrielle”)
and the mandataire ad hoc appointed since the beginning of February
2024, will continue under an amicable conciliation procedure in
order to frame these discussions and facilitate the emergence of a
global agreement within a short and well-defined timetable of 4
months, which can be further extended by another month if needed.
Those discussions were still ongoing at the time the consolidated
financial statements for the year ended December 31, 2023 were
approved by the Board of Directors.
The Group has sufficient liquidity to operate
business until a refinancing plan is reached and is also in
discussions with its financial creditors regarding an interim
financing, which would provide an additional liquidity cushion to
the Group until a global agreement on the refinancing plan is
reached.
All these circumstances create a material
uncertainty upon the ability of the Group to continue as a going
concern in the event the Group is unable to negotiate a new
refinancing plan or to execute an important asset disposal plan. In
that case, Atos SE may not be able to realize its assets or settle
its liabilities within the ordinary course of its operations, and
the application of IFRS accounting standards in the ordinary
context of going concern, in particular with regards to the
measurement of assets and liabilities, may not be appropriate.
Atos will inform the market in due course of the
progress of the refinancing discussions with its financial
creditors, its contemplated disposals, as well as any potential
changes in its capital structure arising from a final global
refinancing agreement, including the issuance of new equity, which
will likely result in a dilution of the existing shareholders.
2023 performance by Regional Business
Unit
In € million |
2023Revenue |
2022revenue |
2022revenue* |
Organic variation* |
Americas |
2 441 |
2 794 |
2 626 |
-7,1% |
Northern Europe & APAC |
3 163 |
3 199 |
3 123 |
+1,3% |
Central Europe |
2 506 |
2 588 |
2 452 |
+2,2% |
Southern Europe |
2 284 |
2 420 |
2 198 |
+3,9% |
Others & Global Structures |
300 |
269 |
248 |
+21,1% |
Total |
10 693 |
11 270 |
10 648 |
+0,4% |
In € million |
2023Operating margin |
2022 Operating margin |
2022Operating margin* |
|
2023Operating margin % |
2022 Operating margin% |
2022 Operating margin%* |
Organic variation* |
Americas |
249 |
222 |
202 |
|
10.2% |
7.9% |
7.7% |
+250 bps |
Northern Europe & APAC |
163 |
115 |
112 |
|
5.2% |
3.6% |
3.6% |
+160 bps |
Central Europe |
31 |
-10 |
-23 |
|
1.3% |
-0.4% |
-0.9% |
+220 bps |
Southern Europe |
99 |
106 |
81 |
|
4.3% |
4.4% |
3.7% |
+60 bps |
Others & Global Structures |
- 77 |
-78 |
-84 |
|
NA |
NA |
NA |
NA |
Total |
467 |
356 |
289 |
|
4.4% |
3.2% |
2.7% |
+170 bps |
*: At constant scope and average exchange
rates
Americas revenue was €2,441
million, down -7.1% organically, reflecting a general slowdown in
market conditions, delays in contracts awards and tougher
comparison with the prior year. Both Eviden and Tech Foundations
businesses contributed to that organic revenue decline. In Advanced
Computing, the delivery of an HPC in South America in 2022 could
not be compensated by another HPC delivery in 2023, while softer
market conditions led to volume reductions in Digital, particularly
in Finance, Transportation and Healthcare. Tech Foundations was
impacted by contracts scope reductions, notably in Pharmaceutical
and Finance verticals.
Operating margin was €249 million or 10.2%, up
+250 basis points organically. Eviden margin improved towards
mid-teens and Tech Foundations reached mid-single digit reflecting
stronger productivity and costs improvements.
Northern Europe &
Asia-Pacific revenue was €3,163 million, up +1.3%
organically, reflecting strong demand from the Public Sector across
Europe and solid performance in the Financial vertical in
Asia-Pacific. Digital activities were up high-single digit on solid
demand from application modernization and cloud transformation,
partially offset by reduction in low-margin Lab-as-a-Service
business and lower HPC revenue compared with the prior year, which
benefited from several supercomputer deliveries. In Tech
Foundations, growth came mostly from stronger Public Sector
business in the United Kingdom and in the Financial sector in
Asia-Pacific.
Operating margin was €163 million, or 5.2%, up
+160 basis points organically thanks to continued delivery
optimization actions and tighter cost controls.
Central Europe revenue was
€2,506 million, increasing by +2.2% organically. Solid double-digit
growth in Digital and BDS, driven by strong demand in the Public
and Automotive sectors was partially offset by revenue decline in
Tech Foundations, which was impacted by lower activity in
Manufacturing and Banking.
Operating Margin was €31 million or 1.3%, up
+220 basis points organically. Both Business lines reported
improvements in profitability reflecting the benefit of workforce
optimization actions and tighter management of under-performing
contracts.
Southern Europe revenue was
€2,284 million, up+3.9% organically. High-single digit growth in
Eviden was driven by strong performance in Big Data and
Cybersecurity and HPC. Digital also grew, benefitting from new
customers contracts as well as demand for application modernization
and decarbonation solutions. Tech Foundations reported a low single
digit decline, as solid performance with Public Sector clients were
offset by volume reductions in the Aerospace and Transport &
Logistics sectors.
Operating margin was €99 million or 4.3%, up +60
basis point organically, primarily from improvement in Tech
Foundations profitability.
Others and global structures
encompass Middle East, Africa, Major Events as well as the Group’s
global delivery centers and global structures. Revenue was €300
million, up +21% organically supported by double-digit growth in
Major Events with the European Games in Poland and with the ramp-up
of a contract in Sports & Major Events with UEFA. Overall
profitability improved by €+7 million organically reflecting
tighter cost management in the delivery centers and improved
profitability in Growing Markets.
Operating Margin to Operating
income
In € million |
2023 |
2022 |
Operating margin |
467 |
356 |
Reorganization |
-696 |
-352 |
Rationalization and associated costs |
-38 |
-69 |
Integration and acquisition costs |
4 |
-30 |
Amortization of intangible assets (PPA from acquisitions) |
-108 |
-140 |
Equity based compensation |
-19 |
-25 |
Impairment of goodwill and other non-current assets |
-2,546 |
-177 |
Other
items |
-169 |
-359 |
Operating (loss) |
-3,106 |
-795 |
Non recurring items were a net expense of €3,573
million.
Reorganization costs amounted
to €696 million, consisting in €343 million in workforce
adaptation, of which €147 million for the extension of the German
restructuring plan launched in 2022, and €353 million in separation
and transformation costs.
Rationalization and associated
costs was €38 million, consisting primarily in the
datacenter consolidation plan in North America.
Integration and acquisition
costs were a net income of €4 million as certain earn-out
and retention schemes did not materialize and were thus released to
the income statement.
Amortization of intangible assets recognized in
the purchase price allocation exercises amounted
to €108 million, compared with €140 million in 2022. The
decrease originated from PPA assets being derecognized as the
underlying entities were disposed of, as well as the end of the
amortization period for certain assets.
Non-cash goodwill and other non-current
assets impairment amounted to €2,546 million, including
impairment of goodwill, allocated to Eviden of € 1,920 million, and
Tech Foundations of €328 million, as well as €173 million
impairment on PPA assets. The annual goodwill impairment test is
performed at year end, in compliance with IAS 36. Fair values are
determined based on a multicriteria approach, including Discounted
Cash Flows (“DCF”), discount rates reflecting estimated execution
risks, and adjusted trading multiples, consistent with the
methodology applied in prior years.
In 2023, Other items were a net
expense of €169 million compared with €359 million in 2022. In
2023, those exceptional items mainly included:
- Reassessment of
onerous contracts that were accounted for in Other Items in 2021
for €36 million;
- Litigations
costs and vendor contract renegotiations for €65 million;
- Net capital loss
arising from disposals for €46 million, primarily due to the
disposal of UCC.
As a result, operating loss was at €-3,106
million, compared with a loss of €-795 million in 2022.
Operating Income to Net income Group
Share
In € million |
2023 |
2022 |
Operating (loss) |
-3,106 |
-795 |
Net financial expense |
-227 |
-175 |
Tax charge |
-112 |
-46 |
Non-Controlling interests |
-1 |
0 |
Share of net profit of equity-accounted investments |
5 |
4 |
Net (loss) Group Share |
-3,441 |
-1,012 |
Normalized net income (loss) (Group share) |
73 |
-28 |
Basic earning per share |
-31.04 |
-9.14 |
Diluted earning per share |
-31.04 |
-9.14 |
Net financial expense was €227
million and was composed of:
- a net cost of financial debt of
€102 million, which increased by €+73 million due to higher
interest rates, coupled with additional drawdowns on bank
borrowings; and
- Other net financial expense of €125
million, which include in particular the interest component on
pension and lease.
The tax charge for 2023 was
€112 million.
Net loss group share was €3,441 million, mainly
impacted by the goodwill and other non-current assets impairment
charges of €2,546 million and reorganization expense for €696
million.
The normalized net profit group
share excluding unusual, abnormal and infrequent items
(net of tax) was €73 million, compared with a loss of €-28 million
in 2022. Reconciliation between the net loss group share and the
normalized net profit group share is presented in appendix.
Earnings per share
Basic and diluted earnings per share were
€-31.04 per share in 2023, while normalized and diluted earnings
per share were €0.66 per share.
Free cash flow and net cash
In € million |
2023 |
2022 |
Operating
Margin before Depreciation and Amortization (OMDA) |
1,026 |
1,020 |
Capital expenditures |
-205 |
-251 |
Lease payments |
-358 |
-405 |
Change in working capital requirement* |
-391 |
126 |
Cash from operations (CFO) |
73 |
489 |
Tax paid |
-77 |
-59 |
Net cost of financial debt paid |
-102 |
-29 |
Reorganization in other operating income |
-605 |
-192 |
Rationalization & associated costs in other operating
income |
-47 |
-72 |
Integration and acquisition costs in other operating income |
-8 |
-19 |
Other changes** |
-312 |
-305 |
Free Cash Flow (FCF) |
-1,078 |
-187 |
Net (acquisitions) disposals |
411 |
-109 |
Capital increase |
- |
7 |
Share buy-back |
-3 |
-2 |
Dividends paid |
-35 |
-11 |
Change in net (debt) |
-705 |
-301 |
Opening net cash (debt) |
-1,450 |
-1,226 |
Change in net cash (debt) |
-705 |
-301 |
Foreign exchange rate fluctuation on net cash (debt) |
-75 |
77 |
Closing net (debt) |
-2,230 |
-1,450 |
* Change in working capital requirement
excluding the working capital requirement change related to items
reported in other operating income and expense.** "Other changes"
include other operating income and expense with cash impact
(excluding staff reorganization, rationalization and associated
costs, integration and acquisition costs) and other financial items
with cash impact, net long term financial investments excluding
acquisitions and disposals, and profit sharing amounts payable
transferred to debt
Free cash flow was €-1,078
million for the full year, reflecting higher restructuring and
separation costs for €377 million, and €502 million lower working
capital actions compared with the prior year.
Capital expenditures and lease
payments totaled €562 million, down €-94 million from the prior
year reflecting the actions from the Group to further optimize
lease and capital expenditure, as well as to move to less
capital-intensive activities.
Change in working capital
requirement was €-391 million, primarily from €502 million
lower working capital actions compared with prior year. At
year-end, total specific actions carried out by the Group to
optimize its working capital amounted to € 1.8 billion,
compared with €2.3 billion at the end of 2022. They comprised:
- Non-recourse
transfer of trade receivables for €712 million (€862 million at
December 31, 2022);
- Other specific
actions on trade receivables for € 455 million (€647 million at
December 31, 2022), consisting mainly in the reduction in the
average payment period for trade receivables; as well as
- Specific
actions on trade payables for €650 million (€810 million at
December 31, 2022), resulting mainly from the extension of supplier
payment execution. Those specific actions did not comprise any
reverse factoring measure.
Cash out related to taxes paid
increased by €+18 million and amounted to €77 million in 2023,
including €11 million of taxes paid in connection with carve-out
transactions and disposals completed during the year.
Net cost of financial debt was
€102 million and increased by €+73 million due to higher interest
rates, coupled with additional drawdowns on bank borrowings.
The total of reorganization,
rationalization & associated costs and
integration & acquisition costs reached €660
million compared with €283 million in 2022.
- Restructuring cost was €605
million, of which €382 million of one-off separation costs;
- Rationalization cost was €47
million and resulted from the closure and consolidation of data
centers, mainly in North America;
- Integration cost was €8
million.
Cash out related to Other
changes was €312 million and consisted primarily of costs
incurred on onerous contracts for €126 million, payments related to
past settlements with customers and vendors and legal costs for
€115 million.
As a result of the above impacts mainly driven
by reorganization costs and the change in the working capital
requirement, the Group presented a negative Free Cash
Flow of €-1,078 million in 2023, compared with €-187
million in 2022.
The net cash impact resulting from net disposals
amounted to €+411 million and mainly originated from the disposal
of:
- The Group Italian operations to
Lutech,
- EcoAct and its subsidiaries to
Schneider Electric,
- The share in the joint-arrangement
with the State Street group,
- The UCC business
No dividends were paid to Atos
SE shareholders in either 2023 and 2022. The €35 million cash out
corresponded to taxes withheld on internal dividend
distributions.
Foreign exchange rate
fluctuation represented an increase in net debt of €75
million mainly coming from the evolution of exchange rates of the
US Dollar and British Pound against the Euro.
As a result, the Group net debt
position as of December 31, 2023 was €2,230 million,
compared with €1,450 million as of December 31, 2022.
Outlook
Full year 2024
Full year 2024 objectives are not provided at
this time given current market uncertainties and contemplated sale
of assets.
2026 objectives
The Group withdraws previously communicated
financial objectives given the contemplated sale of assets and the
ongoing debt refinancing discussions.
Human resources
The total headcount was
95,140 at the end of December 2023, a decrease by
-14.1% compared with 110,797 at the end of December 2022. This was
due to the divestures of Atos Italy, UCC, State Street
joint-venture, EcoAct and Elexo. Excluding the scope impact, the
decrease would have been -5.7% over the period.
During the year 2023, the Group hired 14,839
staff (of which 92.0% were Direct employees). 70% of hirings were
in offshore and nearshore countries.
Attrition rate declined from 21.6% in 2022 to
14.5% in 2023, reflecting the strong dedication of employees to the
Group. In particular, attrition rate declined in offshore centers
from 27.8% to 17.1% and retention of key personnel has improved
compared with last year despite leadership changes at the top of
the organization.
Industry-leading CSR
recognition
In 2023, Atos remained as one of the best rated
companies in the IT service sector for its Corporate Social
Responsibility performance. In September 2023, for the fourth year
in a row, Atos was awarded the EcoVadis Platinum
Award for its Corporate Social Responsibility performance,
maintaining the highest score ever received by the Group, at 84
points out of 100. As a result, Atos confirms its position in the
top 1% of companies assessed by EcoVadis within its sector. Atos
was upgraded in November 2023 to the highest ESG rating available
(AAA) by MSCI, ranking it among the top 11% of
companies in the “Software and Service” industry. Also, in November
2023, Atos was ranked in the top 4% of the IT Services industry in
the 2023 S&P Global Corporate Sustainability
Assessment with a score of 82/100.
Dividend
Atos Board of Directors decided, in its meeting
held on March 25, 2024, to not propose a dividend to the next
Annual General Meeting.
Consolidated financial
statements
Atos consolidated financial statements for the
year ended December 31, 2023, were approved by the Board of
Directors on March 25, 2024.
Audit procedures on the consolidated financial
statements have been completed and the audit report is in the
process of being issued with an unqualified opinion. It is expected
that the audit report on the Group’s consolidated financial
statements will include a separate section about the material
uncertainty related to the going concern.
Conference call
Atos’ Management invites you to an international conference call
on the Group 2023 results, on Tuesday, March 26, 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/tppiw22z
- 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/BId8617ae02024472d98cf92ca14549339
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.
Forthcoming events
April 25, 2024
(Before Market
Opening) |
|
First quarter 2024 revenue |
Contacts
Investor
relations |
|
David
Pierre-Kahninvestors@atos.net+33 6 28 51 45 96 |
Individual
shareholders |
|
0805 65 00 75 |
Press
contact |
|
globalprteam@atos.net |
APPENDIX
Q4 2023 revenue
In € million |
Q4 2023Revenue |
Q4 2022Revenue |
Q4 2022Revenue* |
Organic variation* |
Eviden Perimeter |
1,247 |
1,427 |
1,302 |
-4.2% |
Tech Foundations Perimeter |
1,308 |
1,462 |
1,253 |
+4.4% |
Total |
2,555 |
2,889 |
2,554 |
+0.0% |
In € million |
Q4 2023Revenue |
Q4 2022Revenue |
Q4 2022Revenue* |
Organic variation* |
Americas |
509 |
665 |
566 |
-10.1% |
Northern Europe & APAC |
810 |
772 |
748 |
+8.2% |
Central Europe |
582 |
693 |
587 |
-0.9% |
Southern Europe |
571 |
679 |
578 |
-1.1% |
Others & Global Structures |
83 |
80 |
75 |
+9.9% |
Total |
2,555 |
2,889 |
2,554 |
+0.0% |
*: at constant scope and exchange rates
Net loss Group share to normalized net
income Group share
In € million |
2023 |
2022 |
Net (loss) attributable to owners of the
parent |
-3,441 |
-1,012 |
Other operating income and expense, net of tax |
-3,514 |
-906 |
Net gain (loss) on financial instruments related to Worldline
shares, net of tax |
- |
-78 |
Normalized net income (loss) - Attributable to owners of
the parent |
73 |
-28 |
FY 2022 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 2022 revenue and OM at
constant scope and foreign exchange rates is presented below, by
Business Lines and Regional Business Units.
In 2023, the Group reviewed the accounting
treatment of certain third-party standard software resale
transactions following the decision published by ESMA in October
2023 that illustrated the IFRS IC decision and enacted a
restrictive position on the assessment of Principal vs. agent under
IFRS 15 for such transactions. The revenue was negatively impacted
by € 62 million. The impact affected Eviden in the Americas RBU
without impacting the operating margin. The revenue for 12-month
period ended December 31, 2022 was restated by € 71 million to
€ 11,270 million.
FY 2022 revenueIn € million |
FY 2022Published |
Restatement |
FY 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
FY 2022* |
Eviden |
5,315 |
-71 |
5,244 |
-4 |
-218 |
-78 |
4,945 |
Tech
Foundations |
6,026 |
|
6,026 |
4 |
-220 |
-106 |
5,703 |
Total |
11,341 |
-71 |
11,270 |
0 |
-438 |
-184 |
10,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2022 Operating marginIn €
million |
FY 2022Published |
Restatement |
FY 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
FY 2022* |
Eviden |
276 |
0 |
276 |
-2 |
-31 |
-10 |
233 |
Tech
Foundations |
79 |
|
79 |
3 |
-22 |
-5 |
56 |
Others &
Global Structures |
0 |
|
0 |
-2 |
1 |
0 |
0 |
Total |
356 |
0 |
356 |
0 |
-52 |
-15 |
289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2022 revenueIn € million |
FY 2022 published |
Restatement |
FY 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
FY 2022* |
Americas |
2,866 |
-71 |
2,794 |
-9 |
-51 |
-108 |
2,626 |
Norther Europe
& APAC |
3,199 |
|
3,199 |
6 |
-19 |
-62 |
3,123 |
Central
Europe |
2,588 |
|
2,588 |
0 |
-144 |
8 |
2,452 |
Southern
Europe |
2,420 |
|
2,420 |
2 |
-224 |
0 |
2,198 |
Others &
Global structures |
269 |
|
269 |
0 |
0 |
-21 |
248 |
Total |
11,341 |
-71 |
11,270 |
0 |
-438 |
-184 |
10,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FY 2022 Operating marginIn €
million |
FY 2022 published |
Restatement |
FY 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
FY 2022* |
Americas |
222 |
0 |
222 |
0 |
-10 |
-10 |
202 |
Northern
Europe & APAC |
115 |
|
115 |
3 |
-2 |
-4 |
112 |
Central
Europe |
-10 |
|
-10 |
0 |
-13 |
0 |
-23 |
Southern
Europe |
106 |
|
106 |
0 |
-25 |
0 |
81 |
Others &
Global structures |
-78 |
|
-78 |
-2 |
-2 |
-2 |
-84 |
Total |
356 |
0 |
356 |
0 |
-52 |
-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 UCC across all regions,
of EcoAct in Americas, Southern Europe and Northern Europe &
Asia-Pacific, of State Street JV in Americas, and of Elexo in
Southern Europe.
Currency effects negatively contributed to
revenue for €- 184 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.
Q4 2022 Revenue at constant scope and
exchange rates reconciliation
For the analysis of the Group’s performance,
revenue for Q4 2023 is compared with 2022 revenue at constant scope
and foreign exchange rates.
Reconciliation between the 2022 reported fourth
quarter revenue and the 2022 fourth quarter revenue at constant
scope and foreign exchange rates is presented below, by Business
Lines and Regional Business Units :
Q4 2022 revenueIn € million |
Q4 2022 published |
Restatement |
Q4 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
Q4 2022* |
Eviden |
1,498 |
-71 |
1,427 |
7 |
-103 |
-29 |
1,302 |
Tech
Foundations |
1,462 |
|
1,462 |
-7 |
-176 |
-27 |
1,253 |
Total |
2,960 |
-71 |
2,889 |
0 |
-279 |
-56 |
2,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2022 revenueIn € million |
Q4 2022 published |
Restatement |
Q4 2022 restated |
Internal transfers |
Scope effects |
Exchange rates effects |
Q4 2022* |
Americas |
737 |
-71 |
665 |
0 |
-51 |
-48 |
566 |
Northern
Europe & APAC |
772 |
|
772 |
0 |
-19 |
-5 |
748 |
Central
Europe |
693 |
|
693 |
0 |
-108 |
2 |
587 |
Southern
Europe |
679 |
|
679 |
0 |
-101 |
0 |
578 |
Others &
Global structures |
80 |
|
80 |
0 |
0 |
-5 |
75 |
Total |
2,960 |
-71 |
2,889 |
0 |
-279 |
-56 |
2,554 |
* : At constant scope and foreign exchange rates
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 21st, 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.
Regional Business Units include
Americas including North America (USA, Canada,
Guatemala and Mexico) and South America (Argentina, Brazil, Chile,
Colombia, Uruguay, and Peru), Northern Europe and
Asia-Pacific including Northern Europe (United Kingdom
& Ireland, Belgium, Denmark, Estonia, Belarus, Finland,
Lithuania, Luxembourg, The Netherlands, Norway and Sweden) and
Asia-Pacific (Australia, China, Hong Kong, India, Japan, Malaysia,
New Zealand, Philippines, Singapore, Taiwan, Thailand and South
Korea), Central Europe (Austria, Bosnia and
Herzegoniva, Bulgaria, Croatia, Czech Republic, Germany, Greece,
Hungary, Israel, Poland, Romania, Serbia, Slovenia, Slovakia, and
Switzerland), Southern Europe (Andorra, France,
Italy, Portugal, and Spain) and Rest of the World
including Middle East & Africa (AbuDhabi , Algeria, Benin,
Burkina Faso, Egypt, Gabon, Ivory Coast, Kenya, Lebanon,
Madagascar, Mali, Mauritius, Morocco, Namibia, Qatar, , Kingdom of
Saudi Arabia, Senegal, South Africa, Tunisia, Turkey and UAE),
Major Events and Global Delivery Centers.
1 The conciliation is a procedure, so-called
amicable or preventive, for dealing with financial difficulties. It
is provided for in the Commercial Code. The negotiations, which
take place under the aegis of a conciliator appointed by the
President of the Commercial Court, are confidential. The
conciliator's mission is to encourage the conclusion of an amicable
agreement between the debtor and its creditors, who are called upon
to do so, aimed at putting an end to the company's difficulties and
ensuring its continuity.
- PR - Atos 2023 annual results
- PR - Atos 2023 annual results
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