PARIS (Agefi-Dow Jones) – Digital services company Atos said on Wednesday that it has suffered a sharp drop in its results for the first half of this year and is forecasting full-year 2022 operating margin and cash at the lower end of previously specified ranges.
In the first half of this year, Atos’ revenue was €5.56 billion, down 0.6% at constant exchange rates and down 2.1% year-on-year. Only in the second quarter, revenue organically decreased by 1.9%.
Operating margin for the first half of 2022 was €59 million compared to €302 million for the first half of 2021, or 1.1% of revenue, compared to a margin of 5.6% recorded a year earlier.
Free cash flow was negative at €555 million in the last six months, compared to an outflow of €369 million a year earlier.
Atos made a net loss of €503 million in the first half of this year, compared with a loss of €129 million in the first half of 2021. Normalized net profit, which lists unusual and one-time items, is defined as a loss of 119 million euros against a profit of 162 million for the first six months of 2021.
A new secured loan
Regarding its 2022 forecasts, Atos said it now expects to achieve the lower end of its forecast range of operating margins of between 3% and 5% and operating cash flow in the range of -€150 million to €200 million. Atos also confirmed that it expects its revenues to vary at constant exchange rates from a 0.5% decrease to a 1.5% increase this year.
However, the group expects to recover its results in the second half, anticipating a return to positive growth at constant exchange rates and an improvement in operating margin and cash flow.
The company also announced that it has raised new bank financing planned as part of its transformation plan, which was announced on June 14. In this way, Atos received a commitment from its banks to convert part of its revolving credit facility (RCF) – up to €1.5 billion of a total of €2.4 billion – into a term unsecured loan with an 18-month maturity and two 6-month . expansion at the discretion of the company.
Asked during a conference call with reporters about the interest rate on this new loan, CFO Natalie Senesho said the company “cannot speak” on the subject “at this stage.” “The increase in the cost of refinancing is fully included in our financing plan and our forecasts for 2022,” she nevertheless assured.
On June 14, Atos unveiled a strategic plan that involves splitting the group into two separate companies. The first company will retain the Atos name and consolidate the historical data center infrastructure management activities. The second will take the name Evidian and combine activities related to digital transformation, as well as big data and security (BDS). The company estimates that the division could be completed in the second half of next year, and Evidian could go public by the end of 2023.
The plan has been recently embraced by the market, with Atos shares down around 45% since it was unveiled.
Asked about potential approaches from major manufacturers to Atos’ cyber security assets, Nurdin Bihman, the company’s managing director, said the group had “not received any offers to date”. “We have nothing to comment on this issue,” the leader added.
-Julien Marion, Agefi-Dow Jones; +33 (0)1 41 27 47 94; [email protected] edited by: DID
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July 27, 2022 02:09 ET (06:09 GMT)