Atos slashes 2021 forecast again with writedowns of €2.4bn

This follows the French giant’s profit warning from January, its second in seven months

Atos has announced another downward revision of its 2021 financial forecast, admitting its previous predictions issued January 10 2022 could not be met.

The French services giant now expects a revenue drop of 2.6 per cent at constant currency to €10.8bn, compared to its previous forecast of a 2.4 per cent dip from last month.

The group also predicts its operating margin to come in at 3.5 per cent versus the four per cent announced in January.

The free cash flow remains unchanged at negative €420m.

Atos confirmed it will report its full-year earnings on February 28, as well as its 2022 plan.

This is the third profit warning in eight months for the company, which recently named a new CEO following the unexplained departure of the previous chief executive, just days after its second forecast revision.

Rodolphe Belmer replaced Elie Girard who stepped down from the position in October after two years in the role.

Atos added it will book impairments of €1.9bn in goodwill and other non-current assets, and a further €0.5bn in H2 2021 for contract assets, reserves for bad debts and provision for future losses.

It said this resulted mainly from the reassessment of contracts including the financial services BPO contract in the UK, and the group's strategic repositioning to focus on Digital, Cloud, Security and Decarbonization activities, away from classic infrastructure services and UCaaS.

"In light of this change in strategy and the refocusing on growing services, the Group conducted a comprehensive analysis of future recoverability of assets and profitability of legacy contracts," Atos said in a statement.

"As announced in January 10, 2022, this analysis lead to impairment of assets, mainly pertaining to legacy activities."