Atos Q1 results: French reseller reports small growth in revenue

Eviden business grew 2.9 per cent in Q1, while Tech Foundations was still down by 1.7 per cent

French reselling giant Atos grew revenues by 0.4 per cent to €10.7bn (£9.2bn) in its first quarter of 2024, with Eviden up 2.9 per cent and Tech Foundations down 1.7 per cent.

Q1 results also found the group's net loss share stood at €3.4bn, primarily impacted by a €2.5bn impairment charge. However, normalised net income stood at €73m compared with a loss of €28m in 2022.

Free cash flow came in at €1.08bn for the full year, reflecting €377m higher restructuring and separation costs, and €502m lower working capital actions compared with the prior year.

According to the report, big data & security (BDS) grew in the mid-single digits, driven by stronger demand in mission critical systems and high-performance computing, with a large system in Spain and the ramp-up of a new contract signed in India.

Digital activities grew low-single digits reflecting strong revenue growth in Europe, driven by demand for specialised application development, application management and next-generation products and services, which was partially impacted by a general market slowdown in the US, as clients take longer to award new business.

Tech Foundations decline in revenue reflected the deliberate reduction in non-core activities, including the sale of its Italian and UCC businesses and a 19 per cent decrease of hardware and software resale, Atos claimed.

The reseller's CEO, Paul Saleh said: "In 2023, we achieved our revenue and profitability guidance in a challenging environment and while we were executing the separation of the company into two businesses, Tech Foundations and Eviden.

"We reported organic growth at Eviden as the company continues to invest in its offering. The business expanded its leadership in generative AI and application management, securing its customer base with significant renewals and new business particularly in manufacturing, consumer goods and public sector verticals in Europe.

"Eviden has also been awarded the first exascale supercomputer in Europe, a state-of-the-art machine that will allow the acceleration of European scientific research and innovation.

"In Tech Foundations, the business is executing on its transformation plan with a strong renewal rate with existing clients and contracts signature with new logos in both digital workplace and hybrid infrastructure including mainframe management, highlighting the relevance of our offerings and the quality of our service delivery.

"Our operating margin has improved year over year, reflecting the execution of our cost improvement plans, while our cash flow was impacted by workforce optimisation, separation costs and lower working capital actions."

Rescue plans?

Earlier this week, as reported by Reuters, David Layani, CEO of Opepoint - Atos' leading shareholder - said he was prepared to head a rescue plan for the tech group to protect "the integrity of its assets", but Atos said in a statement it had not discussed any such plan.

The French Finance Ministry also said last week France would use all the means at its disposal to guarantee the protection of the strategic assets of Atos after planemaker Airbus pulled the plug on a deal to buy the ailing company's cybersecurity assets.