Atos Q1 revenues struggle after failed Tech Foundations sale

The French reseller's revenues were dragged down by poor performance in the Americas

Troubled French reseller Atos emerges from a difficult Q1, where revenue declined across business divisions Eviden and Tech Foundations, by 3.9 per cent and 1.5 per cent respectively.

Group revenue was down 2.6 per cent or €2.5m in Q1.

The reseller attributed the Eviden revenue decline to softer market conditions in the Americas, which delivered a 7.5 per cent drop and the UK.

Revenue from Tech Foundations fell due to a "lower scope of work with certain customers in the Americas and Central Europe".

Operating margin held stable at 1.9 per cent or €48m, while net debt spiked to €3.9bn, reflecting a reduction in working capital actions compared to December 2023.

Group operating margin down to 1.9 per cent of revenue compared to 3.3 per cent in the prior year, with Eviden operating margin standing at 1.9 per cent and Tech Foundations at two per cent.

On announcing the results, CEO Paul Saleh acknowledged market challenges and highlighted progress in transformation plans.

These include a refinancing proposal outlined on April 9 to address upcoming debt maturities, and adjustments to the 2024-2027 business plan to reflect current performance.

Splitting up Atos

The Q1 results cap off a bumpy year for the Paris-HQ firm.

The reseller's operating income plummeted in Q2 2023, driving share price to dip as well.

In August, the company began talks to sell Tech Foundations to EP Equity Investment, a PE firm owned by Czech billionaire Daniel Křetínský, but the negotiations fell through in February 2024 after the two sides couldn't agree on financial terms.

Atos did, however, manage to sell off its comms business, Unify, to rival Mitel, in October last year.