Atos reports full year 2024 results

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

Press release

Atos reports full year 2024 results

Recovery of the commercial activity in Q4 2024

• Q4 order entry at €2.7 billion
• Q4 book to bill at 117%, +9 points vs Q4 2023, benefitting from the signature of large multi-year contract renewals and wins
• FY 2024 book to bill at 82% vs 94% in prior year

  Get the latest news
  delivered to your inbox

  Sign up for The Manila Times newsletters

  By signing up with an email address, I acknowledge that I have read and agree to the Terms of Service and Privacy Policy.

FY 2024 revenue: €9,577 million, down -5.4% organically, impacted by previously-established contract terminations or scope reductions and by market softness in key geographies

• Eviden: down -6.7% organically
• Tech Foundations down -4.1% organically

Operating margin of 2.1% at €199m, with Eviden at 2.0% and Tech Foundations at 2.2%

• Down -210 bps organically compared with FY 2023, mainly due to the allocation to the business of SG&A costs previously allocated to Other Operating Income & Expenses, as part of the separation project in prior year
• Operating margin includes circa €40 million of provision for underperforming contracts following negotiations with customers

Free cash flow at €-2,233 million reflecting the end of one-off working capital optimization actions and higher capex linked to High Performance Computing contracts

• Working capital optimization at December 2024 of €0.3 billion compared to €1.8 billion in prior year
  • Consisting solely of customer invoices paid in advance without any discount and on a pure voluntary basis;
  • No usage at all of account receivable factoring or specific optimization on trade payables.

Net income group share of €248 million, including notably:

• €3,520 million income from the financial restructuring, including a €2,766 million gain on the debt-to-equity swap and €965 million IFRS 9 debt fair value treatment, which will be amortized in subsequent years
• Goodwill and other non-current assets impairment charge of €2,357 million, reflecting the decrease of the Group's enterprise value, which takes into account a lower fair value of the financial debts and a lower market capitalization

Paris, March 5, 2025 - Atos, a global leader in digital transformation, high-performance computing and information technology infrastructure, today announces its 2024 financial results.

Philippe Salle, Atos Chairman of the Board of Directors and Chief Executive Officer, declared:

"It was with great enthusiasm and conviction that I have joined the Atos Group in October 2024. Now that our financial restructuring has been successfully completed in December, the Group can focus on its transformation journey and on providing the highest level of support to our customers through innovation and quality of service. I will present my vision for Atos and our mid-term strategy during a Capital Markets Day on May 14.

During the fourth quarter, our commercial activity recovered thanks to the positive change of perception of our clients, who took note of the improvement of our credit rating. This positive commercial momentum materialized in renewals or extensions of large strategic multi-year contracts.

I would like to take this opportunity to sincerely thank the teams involved for their outstanding contribution to the financial structuring of the company and to our employees, customers and partners for their continued support.”

FY 2024 performance highlights

*: at constant scope and December 2024 average exchange rates

FY 2024 performance by Business

*: at constant scope and December 2024 average exchange rates

Group revenue was €9,577 million, down -5.4% organically compared with FY 2023. Overall, Group revenue evolution in 2024 reflects previously-established contract terminations or scope reductions and market softness in key geographies

Eviden revenue was €4,604 million, down -6.7% organically.

• Digital activities decreased high single digit. The business was impacted by previously-established contract terminations and contract scope reductions, as well as by the continued market softness in North America, in the UK & Ireland and in Benelux and the Nordics.
• Big Data & Security (BDS) revenue was roughly stable organically. Advanced Computing grew mid-single digit with large project deliveries in Denmark and Germany particularly during the fourth quarter. Revenue in Digital Security decreased low single digit due to contract terminations and volume decline.

Tech Foundations revenue was €4,972 million, down -4.1% organically.

• Core revenue (excluding BPO and value-added resale ("VAR”)) decreased low single digit. Stronger revenue in Major Events (related to the Paris Olympic & Paralympic games and the UEFA) was offset by previously-established contract terminations and completions in North America and by contract scope and volume reduction in the UK.
• Non-core revenue declined high single digit as planned, reflecting deliberate reduction of BPO activities in the UK and reduced value-added resale for hardware and software products.

Group operating margin was €199 million representing 2.1% of revenue, down -210 basis points organically compared with 2023:

• This margin decrease comes mainly from the allocation to the business of €103 million SG&A costs previously allocated to Other Operating Income & Expenses as they related to the separation project conducted in 2023. The profitability of the Group was also impacted by revenue decrease and lower utilization of resources. Operating margin also includes circa €40 million of provision for underperforming contracts following negotiations with customers
• Eviden's operating margin was €90 million or 2.0% of revenue, down -350 basis points organically. Beyond the allocation of SG&A costs to the business for €48 million, profitability was also impacted by revenue decrease and lower utilization of resources.
• Tech Foundations' operating margin was €109 million or 2.2% of revenue down by -70 basis points organically. The positive impacts from the continued execution of the transformation program and the accelerated reduction of under-performing contracts via renegotiation were offset by higher allocation of SG&A cost to the business for €55 million.

FY 2024 performance by Regional Business Unit

*: at constant scope and December 2024 average exchange rates

North America revenue was €1,909 million, down -12.3% organically, impacted by contract terminations and general slowdown in market conditions.

• Eviden revenue was down double digit, impacted by contract terminations and volume decline in Healthcare, Finance, and Transport & Logistics. BDS revenue remained stable.
• Tech Foundations revenue was down high single digit due to contract completions and terminations in Media and in Insurance, as well as scope reductions with select customers.

Operating margin was €161 million or 8.5% of revenue, down -200 basis points organically.

• Eviden's margin declined, impacted by volume reduction and contract terminations.
• Tech Foundations margin declined, due to lower utilization of resources and volume reduction.

UK & Ireland revenue was €1,500 million, down -14.9% organically.

• Eviden revenue was down double digit. Digital revenue decreased, reflecting contract completions and volume reduction in the Public Sector. BDS revenue decreased as well, following the discontinuation of the low-margin "computing as a service” offering.
• Revenue in Tech Foundations was down double digit, due to contract completion in Public Sector BPO activities.

Operating margin was €72 million, or 4.8% of revenue, up +40 basis points organically. Tech Foundations margin benefited from the extension of a large multi-year contract renewed at better financial terms, while Eviden margin was impacted by revenue decline and lower utilization of resources in Digital.

Benelux and the Nordics revenue was € 946 million, up +4.6% organically

• Eviden revenue was up double digit, thanks particularly to BDS, with a new supercomputer sold to an innovation center in Denmark.
• Revenue in Tech Foundations was down low single digit, with contract completions and volume decline in Healthcare and in Utilities.

Operating margin was €7 million, or 0.8% of revenue, down -170 basis points organically. Profitability was impacted by project overruns and lower utilization of resources in Digital.

Central Europe revenue was € 2,207 million, down -2.1% organically.

• Eviden revenue was down low single digit. Decline in Digital due to volume reduction from Manufacturing and Defense customers was partially offset by the ongoing delivery of a large HPC in Germany.
• Tech Foundations revenue was down low-single digit, reflecting scope reductions in the Banking and Automotive sectors.

Operating margin was €10 million or 0.5% of revenue, down -60 basis points organically. Tech Foundations' margin improvement was offset by Eviden's profitability decrease.

Southern Europe revenue was €2,080 million, down -1.9% organically.

• Eviden revenue was down low-single digit. Digital activities declined due to volume reduction in Automotive, Transport & Logistics and Banking sectors. The delivery of a supercomputer project in Spain provided a higher prior year comparison basis for BDS.
• Tech Foundations revenue declined low single digit due to contract completions with select customers.

Operating margin was €80 million or 3.9% of revenue, broadly stable organically. BDS' margin improvement driven by ongoing contracts deliveries was partially offset by Eviden profitability decrease due to lower utilization of resources in Digital.

Growing Market revenue was €924 million, up +3.4% organically, reflecting stronger contributions related to the Paris Olympic & Paralympic Games and the UEFA contract.

Operating margin was €31 million or 3.4% of revenue, down -650 basis points reflecting higher marketing expenses for Major Events.

Others and Global Structures encompass the Group's global delivery centers and global structures:

• Global delivery centers net cost was €-72 million, broadly stable compared with last year.
• Global Structures net cost was €-91 million and increased by €65 million, impacted by higher SG&A costs allocated to Operating margin in 2024 (rather than allocated to Other Operating Income, as part of the separation project in prior year).

Order entry and backlog

FY 2024 commercial activity

Order entry reached €7.9 billion in 2024. Eviden order entry was €4.1 billion and Tech Foundations order entry was €3.8 billion.

Book-to-bill ratio for the Group was 82% in 2024, down from 94% in 2023.

• Eviden reported a book-to-bill ratio of 88% in 2024, down from 94% in 2023
• Tech Foundations reported a book-to-bill ratio of 76% in 2024, down from 94% in 2023

Q4 2024 commercial activity

Order entry reached €2.7 billion in Q4 2024 bringing book to bill ratio to 117% for the quarter, benefitting from renewed client confidence thanks to the completion of the financial restructuring.

Eviden reported a book-to-bill ratio of 111% for the fourth quarter, increasing strongly by +12 points compared with Q4 2023, notably led by a strong performance of Digital with a book to bill at 127%.

Main contract signatures in the fourth quarter included an application management services contract with a Ministry of Economy, contract renewals in application management and cybersecurity services with a large American retail company and with a large health provider, as well as a High-Performance Computer (HPC) upgrade with a European scientific community.

Tech Foundations reported a book-to-bill ratio of 122% for the fourth quarter, increasing by +6 points compared with Q4 2023.

Main contract signatures in the fourth quarter included a 4-years contract extension for IT and digital transformation services with a state-owned savings bank. Several multi-year strategic contracts were renewed, in particular to provide Digital Workplace and Hybrid Cloud & Infrastructure services for North American and UK & Ireland customers in Financial Services, Public Sector, and Transport & Logistic.

Backlog & commercial pipeline

At the end of December 2024, the full backlog reached €13.0 billion representing 1.3 years of revenue.

The full qualified pipeline amounted to €4.3 billion at the end of December 2024, representing 5.1 months of revenue.

Human resources

The total headcount was 78,112 at the end of December 2024, decreasing by -17.9% compared with the end of December 2023 and includes:

• Transfers of 4,900 employees to new providers in Q3 2024 following contract completions in North America and in the UK. Excluding these transfers, headcount has decreased by circa -13%,
• Worldgrid disposal in Q4 2024 (-973 employees).

During the year, the Group hired 9,388 staff (of which 93.3% were Direct employees).

Employe attrition rate remained in line with historical levels, increasing slightly from 14.5% in 2023 to 15.6% in 2024. FY 2024 retention rate for key employees remained high at 92%.

Net income

Net income group share was €248 million, primarily due to a €3,520 million financial gain related to the financial restructuring of the Group and a €2,858 million cost recorded in Other Operating Income and Expenses, which included a €2,357 million impairment charges on goodwill and non-current assets.

Free cash flow

Free cash flow was €-2,233 million in 2024 reflecting primarily the end of one-off working capital optimization actions resulting in a negative change in working capital requirement for €1,498 million and higher capex linked to HPC contracts for €239 million.

Net debt and debt covenants

At December 31, 2024, net debt was €1,238 million (€275 million including IFRS 9 debt fair value treatment), compared to € 2,230 million as of December 31, 2023. and consisted of:

• Cash and cash equivalents for €1,739 million
• Short-term financial assets for €93 million
• Borrowings for €3,069 million (nominal value) or €2,107 million (IFRS fair value)

The new credit documentation requires the Group to maintain:

• from 31 March 2025, a minimum liquidity level of €650 million, to be verified at the end of each financial quarter;
• from 30 June 2027, as from each half-year end, a maximum level of financial leverage ("Total Net Leverage Ratio Covenant”), which is defined as the ratio of Financial indebtedness (mainly excluding IFRS 16 impacts and IFRS 9 debt fair value treatment) to pre-IFRS 16 OMDA; the ceilings thus applicable will be determined no later than 30 June 2026 with reference to a flexibility of 30% in relation to the Business Plan adopted by the Group at that time; these ceilings will in any event remain between 3.5x and 4.0x.

As at December 31, 2024, the Group financial leverage (as defined above and pre IFRS 9 debt fair value treatment) was 3.16x.

Going concern and liquidity

The consolidated financial statements of the Group for the year ended December 31, 2024 have been prepared on a going concern basis.

The Group's cash forecasts for the twelve months following the approval of the 2024 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 based on the assumptions which were in line with the Group updated business plan communicated on September 2, 2024.

It is reminded that as part of its financial restructuring and following the completion on 18 December 2024 of the final steps of the Accelerated Safeguard Plan approved by the specialized Commercial Court of Nanterre on 24 October 2024, which resulted in:

(i)      a €2.1 billion gross debt reduction through the equitization of €2.9 billion of existing financial debts and the repayment of €0.8 billion interim financings with the new money debt provided to the Company;

(ii)      €1.6 billion of new money debt and €0.1 billion of new money equity from the rights issue and the additional reserved capital increase and

(iii)      no debt maturities before the end of 2029,

the Group now has the resources and flexibility to execute its midterm strategy.

Operating margin to Operating income

Non recurring items were a net expense of €2,858 million.

Reorganization costs amounted to € 119 million.

• Workforce adaptation measures relating mainly to restructuring plans launched in previous years were €77 million compared with €343 million in 2023, as the Group limited restructuring expenses to manage its cash position in 2024.
• Separation and transformation related to the 2023 legal carve-out were incurred mostly at the start of the year for €42 million. In 2023, these costs amounted to €353 million, of which about one third corresponded to internal project costs.

Rationalization and associated costs amounted to € 37 million compared to € 38 million in 2023, mainly corresponding to the continuation of the data centers consolidation program.

Integration and acquisition costs amounted to € 3 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 amounted to €57 million and was mainly composed of Syntel customer relationships and technologies.

Impairment of goodwill and other non-current assets amounted to € 2,357 million and mostly related:

• To the impairment of goodwill for € 2,240 million in both Eviden (Americas and Northern Europe & APAC) and Tech Foundations (Northern Europe & APAC), and ;
• To the impairment of customer relationships for € 109 million in Americas as a result of customer contract terminations.

In 2024, Other items were a net expense of €288 million compared with €169 million in 2023 and included:

• €74 million of net capital gain related to the sale of Worldgrid offset by additional losses recognized on past transactions ;
• €160 million of losses related to onerous contracts that were accounted for in OOI in previous years;
• €96 million of legal fees and settlement related to major litigations, including the settlement concluded with Unisys in December;
• €78 million of current assets write offs; and
• €28 million of costs related to early retirement programs in Germany, the UK and France as well as others non-recurring items.

As a result, operating loss was at €-2,659 million, compared with a loss of €-3,106 million in 2023, reflecting primarily the €2,357 million impairment charge.

Operating Income to Net income Group Share