Atos - Q1 2023 Strategic transformation continues to drive stronger
performance
Q1 2023
Strategic transformation
continues to drive stronger
performance
Robust Group organic revenue growth: +2.8%
Eviden: strong growth at +9.5%
Tech Foundations: -2.6% Stabilization of core
revenue and portfolio reshaping
Full-year outlook confirmed
Paris, April
27,
2023 - Atos, a global leader in digital
transformation, high-performance computing and information
technology infrastructure, today announces its revenue for the
first quarter of 2023.
Atos’ leadership team, Nourdine Bihmane, Diane
Galbe and Philippe Oliva, declared: “Atos recorded a robust +2.8%
organic revenue growth in Q1 with both businesses delivering on
their 2023 priorities. Under its new commercial brand, Eviden
reported another solid quarter with high growth, well balanced
between its synergetic Digital, Big Data and Cybersecurity
activities. Tech Foundations continued to reshape its portfolio,
confirming the earlier-than-anticipated stabilization of its core
business while further reducing its exposure to non-strategic
activities. The Group’s performance keeps improving. We heartedly
thank our 110,000 employees for their exceptional commitment.”
In € million |
Q1 2023 |
Q1 2022 |
Variation |
Var.at
cst. curr. |
Var. organic |
Eviden scope |
1,334 |
1,223 |
+9.1% |
+8.9% |
+9.5% |
Tech Foundations scope |
1,473 |
1,524 |
-3.4% |
-3.1% |
-2.6%* |
Group revenue |
2,806 |
2,747 |
+2.2% |
+2.3% |
+2.8% |
* core business revenue : +0.1% |
|
|
|
|
|
Robust organic revenue
growth in Q1: +2.8%
Group revenue was €2,806
million in Q1 2023, up +2.2% year-on-year. Organic growth was
robust, at +2.8%, reflecting the continuous improvement in the
Group’s operational performance. Scope effects accounted for -0.5%
(exit of Russia, divestment of EGSE and Sislog). Foreign exchange
contributed -0.1%, mainly reflecting the depreciation of the pound
sterling against the Euro over the period, mitigated by the
appreciation of the US dollar.
Eviden reported a strong +9.5%
organic revenue growth in Q1, well balanced between its synergetic
activities in Digital, Big Data and Cybersecurity. Digital further
accelerated its growth in Q1, driven by new business in application
development and modernization, particularly in European markets.
Growth was strong in Advanced Computing as the HPC activity
continued to ramp up. Digital Security reported another quarter of
double-digit growth, with an increasing emphasis on next-generation
cybersecurity services and products focused on identity management,
encryption and managed detection and response in hybrid cloud
environments.
In Q1, Tech Foundations
confirmed the earlier-than-anticipated stabilization of core
activities in infrastructure, private cloud & platforms,
digital workplace and professional services, at +0.1% organic.
Portfolio reshaping actions lead to a further managed reduction in
non-strategic activities (BPO, hardware & software resale,
UCC), resulting in a -2.6% organic contraction for the whole Tech
Foundations perimeter. In March, Atos was positioned as a Leader in
the Gartner® Magic Quadrant™ for Outsourced Digital Workplace,
based on its completeness of vision and ability to execute, for the
seventh year in a row.
Commercial activity
Order entry was € 2.1 billion in Q1 2023,
representing a book-to-bill ratio of 73% (72% in Q1 2022).
Eviden’s book-to-bill ratio was
79%, impacted by fluctuations in the HPC deal flow, following a
high order intake in Q4 2022 and the slippage of a large HPC
contract for an Indian customer into Q2. Digital’s Q1 order entry
was reflective of the continued focus on smaller, low-risk
contracts and short-term bookings with faster revenue yields (59%
of Q1 order entry was made of contracts with durations below 18
months).
Tech Foundations’ book-to-bill
was 68%, showing continued quarter-on-quarter progress, as sales
capabilities are being gradually enhanced while strict contract
selectivity is consistently applied. New logos and new services
represented 36% of Q1 2023 order entry compared to 25% in Q1
2022.
At the end of March 2023, the Group’s
full backlog was € 19.5 billion, down €-0.9
billion compared to December 2022 excluding the divested Italian
operations. It represented 1.8 years of revenue.
The full qualified pipeline
amounted to € 6.6 billion at the end of March 2023, up € 0.2
billion compared to December 2022 excluding the divested Italian
operations and represented 7.3 months of revenue.
2023 full-year outlook
confirmed
Based on its robust Q1 performance, Atos is
confirming its 2023 full-year outlook.
In 2023, Group revenue organic
growth is expected between -1.0% and +1.0%, as an
acceleration of Eviden’s organic growth will be offset by the
managed reduction of Tech Foundations’ revenue resulting from
portfolio reshaping.
Group operating
margin1 is expected at 4% to 5%. Eviden’s
operating margin is expected to increase compared to 2022. Tech
Foundations’ operating margin is expected to remain in positive
territories, well ahead of plan.
Annual General Meeting to be held on
June 28, 2023
Atos’ Annual General Meeting of shareholders
will be convened shortly, to be held on June 28, 2023.
Strategic
transformation update
Over the past ten months, the intense work
undertaken by Atos teams, particularly with regard to the strategic
refocusing and related internal reorganization of the Group, has
allowed us to get our activity back on track, generate growth, and
achieve gradual margin improvement, while preparing for the future
of our two businesses, Eviden and Tech Foundations. Transformation
is clearly starting to yield results. Atos teams remain committed
to ongoing efforts to sustain this positive momentum and continue
to drive value creation for all
stakeholders.
Progress in divestment program
On March 31st, Atos completed the sale of its
Italian operations (“Atos Italia”)2 to Lutech S.p.A., an Italian
provider of IT services and solutions, with a 100% cash
consideration. The completion of this transaction is a new
milestone in the successful execution of Atos’ divestment plan.
Since June 2022, Atos has closed four transactions and signed
another one thus securing c.80% of the plan’s €700 million expected
proceeds and demonstrating the Group’s ability to execute
efficiently.
Eviden brand launch
The progressive introduction of Eviden as a
commercial brand within the Atos Group started on April 3rd. The
Atos Group will therefore go to market under two brands: the
managed infrastructure services, hybrid cloud, digital workplace,
and professional services, commonly labelled “Tech Foundations”
will retain the Atos brand, while its digital, cloud, cybersecurity
and big data business lines will go to market under the Eviden
brand.
Roll-out of new client-centric organization to
foster innovation and performance
Atos is entering the final phase of the roll-out
of its new organization, a key step of its strategic transformation
of the Group. Atos is progressively implementing a new
client-centric organization across the Group thus allowing Eviden
and Tech Foundations to operate according to two distinct business
models, tailored to their respective go-to-market specificities,
while maintaining close collaboration with one another. All Atos
teams are fully mobilized to ensure a smooth and successful
transition, while implementing the Group’s new operating model.
Objective to complete the separation project in
H2 2023 confirmed
The Group is on track to decide on its
separation project for a completion by the end of 2023. In addition
to the Annual General Meeting of shareholders to be held on June
28, 2023, Atos intends to convene in H2 2023 a specific General
Meeting, dedicated to the finalization of the contemplated spin-off
project.
Human resources
Total headcount was 110,270 at the end of March
2023, down -0.5% compared to 110,797 at the end of December
2022.
In line with its objectives for the quarter,
Atos hired 4,920 new employees (gross) in Q1 2023, compared to
8,234 in Q1 2022.
As of today, Atos has achieved Great Place to
Work® certification in 44 countries out of the 69 countries where
the Group operates. This achievement is a testament to the high
level of employee engagement that the Group's strategic project has
generated, and a recognition of Atos' ongoing commitment to
fostering a positive and inclusive workplace culture.
Last-twelve-months attrition rate at the end of March 2023 was 20%,
compared to 22% as of December 2022.
Further changes in the
composition of the
Atos Board of Directors
Atos is committed to continuously improving its
governance practices. This effort was recognized in September 2022
when Atos received the highest rating available (AAA) in the MSCI
ESG rating.
In 2022, the company appointed five new
directors, including four independent directors and one director
representing the employee shareholders. The board also reorganized
its committees, which now all have independent chairs. After the
work performed by the Nomination and Governance Committee, the Atos
Board of Directors intends to continue making changes to its
membership in 2023 to strengthen its diversity of skills and
experiences and is currently finalizing its selection process which
will result in announcements in due time.
Investor &
Analyst Day focused on Tech Foundations: June 7,
2023
Atos is pleased to invite analysts and investors
to its next investor day, focused on Tech Foundations. The event
will be held on June 7, 2023 in Paris and remotely and will be an
opportunity for management to share an update on Tech Foundations’
business, progress on turnaround plan, as well as its new vision
and opportunities ahead, in light of its recent
better-than-anticipated performance.
Another event focused on Eviden will be held at
a later stage closer to the completion of the separation
project.
Analyst and investor
conference call
Atos Management invites analysts and investors
to a conference call on the Group 2023 first quarter revenue, on
Thursday, April
27,
2023, 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/jzknchkf
- 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/BIe302f1b0888746c2a3cb03f25c47a0f0Upon
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
June 7, 2023
Investor
Day: focus on Tech FoundationsJune 28, 2023
Annual
General MeetingJuly 28,
2023
(Before Market
Opening) First
half 2023 resultsOctober 26,
2023 (Before Market
Opening) Third
quarter 2023 revenue
Contacts
Investor
Relations: Thomas
Guillois +33 6 21 34
36
62 thomas.guillois@atos.net
Media: Anette
Rey
+33 6 69 79 84
88 anette.rey@atos.netAppendix
Q1 2023 revenue by Regional Business
Unit
In € million |
Q1 2023 |
Q1 2022 |
Variation |
Var. at cst.
curr. |
Var. organic |
Americas |
659 |
647 |
+1.8% |
-1.1% |
-1.1% |
Northern Europe & APAC |
788 |
821 |
-4.1% |
-1.3% |
-1.3% |
Central Europe |
633 |
617 |
+2.6% |
+2.0% |
+4.4% |
Southern Europe |
661 |
601 |
+9.8% |
+9.6% |
+9.7% |
Others & Global structures |
66 |
60 |
+8.6% |
+14.1% |
+14.1% |
Group revenue |
2,806 |
2,747 |
+2.2% |
+2.3% |
+2.8% |
|
|
|
|
|
|
Americas revenue decreased by
-1.1% organically in Q1. Tech Foundations activities declined,
although less than anticipated as the current macroeconomic
environment tends to be less detrimental to the infrastructure
business. Growth in Digital was robust, driven by smart platforms
and growing commercial synergies between cloud and application
services.
Northern Europe & APAC
revenue decreased by -1.3% organically. Digital revenue grew
strongly on the back of new business particularly in the public
sector. Tech Foundations activities were broadly flat despite the
exit of a large BPO contract at the end of 2022 and the continued
wind down of value-added resale, evidencing resilience in the core
business. Advanced Computing revenue decreased sharply due to
fluctuations in HPC and Lab-as-a-service revenue.
Central Europe recorded a
robust organic growth, at +4.4%, driven by Digital and Big Data and
Cybersecurity activities, in particular in the public sector. Tech
Foundations activities declined, driven notably by the continued
wind down of value-added resale as well as the reduction of
underperforming contracts. Including the impact of the exit of
Russian operations in 2022 and EGSE in 2023, revenue increased
+2.0% at constant currency.
Southern Europe recorded a
strong +9.7% organic growth, driven by a high HPC revenue, a strong
activity in Cybersecurity and good trends in Digital, notably in
energy & utilities. Tech Foundations activities were flat as
growth in the core business compensated for the deliberate
reduction in value-added resale.
Others and global structures
encompass Middle East, Africa, Major Events as well as two cost
centers: the Group’s global delivery centers and global
structures.
Revenue at constant scope and exchange
rates reconciliation
In € million |
Q1 2023 |
Q1 2022 |
% change |
Statutory revenue |
2,806 |
2,747 |
+2.2% |
Exchange rates effect |
|
-2 |
|
|
|
|
|
Revenue at constant exchange rates |
2,806 |
2,744 |
+2.3% |
|
|
|
|
Scope effect |
|
-13 |
|
Exchange rates effect on acquired/disposed perimeters |
|
-1 |
|
Revenue at constant scope and exchange rates |
2,806 |
2,730 |
+2.8% |
Scope effects (including exchange rates effect
on acquired/disposed perimeters) amounted to €-14 million. They
mainly related to the exit of Russia operations in 2022 and to the
divesture of EGSE in Central Europe, and of Sislog in Southern
Europe in 2023.
About Atos
Atos is a global leader in digital
transformation with 110,000 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) and 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.
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’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 21, 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
APAC including Northern Europe (United Kingdom &
Ireland, Belgium, Denmark, Estonia, Belarus, Finland, Luxembourg,
The Netherlands and Sweden) and Asia-Pacific (Australia, China,
Hong Kong, India, Japan, Malaysia, New Zealand, Philippines,
Singapore, Taiwan, and Thailand), Central Europe
(Germany, Austria, Bulgaria, Bosnia, Croatia, Czech Republic,
Greece, Hungary, Israel, Poland, Romania, Serbia, Slovenia,
Slovakia, and Switzerland), Southern Europe
(France, Andorra, Spain, Portugal, and Italy) and Rest of
the World including 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.
1 At current perimeter, including UCC (transaction expected to
close in H2 2023)2 The transaction scope represented c. 2% of total
Group revenue in 2022 and does not include the Italian EuroHPC
business which will be kept within Atos, nor the Unified
Communications & Collaboration's Italian operations, part of a
separate ongoing divestment project.
Atos (EU:ATO)
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