Atos announces preliminary 2021 financial figures below objectives
Paris,
January
10,
2022 - Referring
to EU regulation No. 596/2014, which provides that issuers shall
inform the public as soon as possible of inside information
directly relevant to them, Atos announces today that the objectives
communicated to the market on July 12, 2021 will not be met due to
several significant effects described herein below.
The figures in this press release, including the
revenue growth at constant currency, operating margin rate and free
cash flow for the year 2021, are not finalized at this stage nor
audited. The detailed full year figures for 2021, including
potential impairment further to the assessment of the recoverable
amount of assets, will be published as planned on February 28, 2022
(after market close).
Rodolphe Belmer, Atos CEO,
said: “I joined the Company last week, at the time when the figures
were being collected and consolidated. The current state of
financial insight leads us to the obligation to issue a profit
warning today due to the significant variance in the financial
KPIs. However, most of the items underlying this severe gap are
non-recurring. In particular, the large gap in Free Cash Flow
mostly stems from working capital.I am convinced that the Company
has the necessary assets and all the talents to operate a swift
turnaround. In this context, I will present at the end of February
a new organization to the Board of Directors, and in Q2 a plan that
will demonstrate the drivers of this turnaround and the focus on
profitable growth and value creation.”
Revenue growth
Revenue in 2021 reached c. € 10.8 billion, a
decrease of c. -2.4% at constant currency.
The variance compared to the full-year objective
of “stable” revenue came from:
- The unexpected reassessment of the
cost to go on transformation, replatforming and operations of a
financial services BPO contract, signed in 2018 for 15 years with a
large UK financial institution, leading to a major revision of the
completion rate on the project, at the end of December 2021, and
therefore translating into a negative revenue impact in 2021.Impact
on full-year revenue growth: c. 70 bps;
- Big Data/HPCs and Unified
Communications & Collaboration project slippages from end of
2021 to 2022 due to supply chain challenges as well as to customer
postponements in Public Sector & Defense in the Netherlands and
the UK.Impact on full-year revenue growth: c. 90 bps;
- Delay to 2022 of final agreements
with several large customers to get compensated for extra work
performed in 2021. These amendments, expected to be signed in
December, would have led to additional revenue in 2021.Impact on
full-year revenue growth: 30 bps; and
- The reduced level of low margin
hardware and software resale in December 2021.Impact on full-year
revenue growth: c. 50 bps.
Operating margin
Operating margin amounted to c. 4% of revenue in
2021. The variance compared to the objective of c. 6% came mostly
from:
- The reduction of the revenue booked
and additional costs in 2021 on the large BPO contract in the UK
mentioned above.Impact on operating margin rate: c. 90 bps;
Additionally, the run phase of the BPO contract
on the remaining next 12 years requires the provision of
c. € 65 million for future losses under “Other
Operating Income and
Expenses”.
- Project slippages to 2022 due to
supply chain challenges as well as to customer postponements.Impact
on operating margin rate: c. 30 bps;
- Delay to 2022 of final agreements
with several large customers as mentioned above to get compensated
for extra work performed in 2021.Impact on operating margin rate:
c. 30 bps; and
- Higher costs than anticipated in
2021 on settlements to close disputes with several customers at
year-end.Impact on operating margin rate: c. 40 bps.
Free Cash Flow
Free Cash Flow is estimated at c. €-420 million.
The variance compared to the objective of positive free cash flow
is mostly due to working capital and in particular to:
- € 200 million from accelerated
supplier payments at the end of 2021, as a result of unforeseen
pressure from critical suppliers and subcontractors in the final
weeks of 2021;
- € 150 million of customer
collections postponed from end of 2021 to 2022 due to the late
acceptance of projects by several customers which ultimately
prevented collection by year-end;
- € 60 million, of which € 30 million
related to advance payments from customers and € 30 million impact
from the large BPO contract in the UK mentioned herein above;
and
- € 30 million from the lower level
of sales of receivables.
As a reminder, the full year Free Cash Flow
figure of €-420 million also comprises the impact of the German
turnaround plan for €-180 million and a reduction of advance
payments from customers for €-200 million, as communicated on July
12, 2021.
The Net Debt at the end of December 2021 is
expected to be at c. €-1.2 billion leading to a Net Debt on OMDA
(under IFRS) ratio of c. 1.1. Taking into account the Worldline
shares covering the Optional Exchange Bond, Net Debt on OMDA ratio
is estimated at c. 0.8.
The objectives for 2022 will be published on
February 28, 2022 at the occasion of the full-year 2021 results
release.
Appendix
|
2021 Objectives |
2021 Provisional
figures |
Revenue growth at constant currency |
Stable |
c. -2.4% |
% Operating Margin to revenue |
c. 6% |
c. 4% |
Free Cash Flow |
Positive |
c. €-420 million |
Conference call
The Management of Atos invites you to an international
conference call, on Monday,
January
10,
2022 at 08:00 am
(CET – Paris) chaired by Rodolphe Belmer, CEO.
You can join the webcast of the conference:
- via the
following link: https://edge.media-server.com/mmc/p/no379pbs
- 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: http://emea.directeventreg.com/registration/7025829
Upon registration, you will be provided with
Participant Dial In Numbers, a Direct Event Passcode and a unique
Registrant ID. 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
February 28, 2022 (After Market Close)
Full
Year 2021 results April 27, 2022 (Before Market
Opening) First
Quarter 2022 revenue May 18, 2022
Annual
General Meeting July 27, 2022 (Before Market Opening)
First
semester 2022 results
ContactsInvestor
Relations: Gilles Arditti +33 1 73 26 00
66 gilles.arditti@atos.netMedia: Anette
Rey +33 6 69 79 84 88 anette.rey@atos.net
About Atos
Atos is a global leader in digital
transformation with 107,000 employees and annual revenue of over €
11 billion. European number one in cybersecurity, cloud and high
performance computing, the Group provides tailored end-to-end
solutions for all industries in 71 countries. A pioneer in
decarbonization services and products, Atos is committed to a
secure and decarbonized digital for its clients. Atos is an SE
(Societas Europaea), listed on Euronext Paris and included in the
CAC 40 ESG and Next 20 indexes.
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.
Disclaimers
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’ beliefs
and expectations and should be evaluated as such. Forward-looking
statements include statements that may relate to Atos’ 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 2020 Universal
Registration Document filed with the Autorité des Marchés
Financiers (AMF) on April 7, 2021 under the registration number
D.21-0269 and the Amendment to the 2020 Universal Registration
Documents filed with the AMF on July 30, 2021 under number
D.21-0269-A01. 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’ shares
for sale or an invitation or inducement to invest in Atos’ shares
in France, the United States of America or any other
jurisdiction.
Revenue organic growth is presented at constant
scope and exchange rates.
Industries include
Manufacturing (Aerospace, Automotive, Chemicals,
Consumer Packaged Goods (Food & Beverage), Discrete
Manufacturing, Process Industries, Services and Siemens),
Financial Services & Insurance (Insurance,
Banking & Financial Services, and Business Transformation
Services), Public Sector & Defense (Defense,
Education, Extraterritorial Organizations, Public Administration,
Public Community Services and Major Events), Telecom, Media
& Technology (High Tech & Engineering, Media, and
Telecom), Resources & Services (Energy,
Retail, Transportation & Hospitality, and Utilities) and
Healthcare & Life Sciences (Healthcare and
Pharmaceutical).
Regional Business Units include North
America (USA, Canada, Guatemala and Mexico),
Northern Europe (United Kingdom & Ireland,
Belgium, Denmark, Estonia, Belarus, Finland, Lithuania, Luxembourg,
The Netherlands, Poland, Russia and Sweden), Central
Europe (Germany, Austria, Bulgaria, Bosnia, Croatia, Czech
Republic, Greece, Hungary, Romania, Serbia, Slovenia, Slovakia,
Israel, and Switzerland), Southern Europe (France,
Andorra, Spain, Portugal and Italy) and Growing
Markets including Asia-Pacific (Australia, China, Hong
Kong, India, Japan, Malaysia, New Zealand, Philippines, Singapore,
Taiwan, and Thailand), South America (Argentina, Brazil, Chile,
Colombia, Uruguay, and Peru), Middle East & Africa (Algeria,
Benin, Burkina Faso, Egypt, Gabon, Ivory Coast, Kenya, Kingdom of
Saudi Arabia, Madagascar, Mali, Mauritius, Morocco, Qatar, Senegal,
South Africa, Tunisia, Turkey and UAE), Major Events and Global
Delivery Centers.
- Atos announces preliminary 2021 financial figures below
objectives
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