Slide 1: FY 2023 Results
FY 2023 Results Bezons, March 26, 2024 © Atos
Slide 2: Today's presenters
Today’s presenters Paul Carlo Jacques-François Saleh d’Asaro Biondo de Prest Group CEO Group COO Group CFO 2 | 26-03-2024 | © Atos
Slide 3: Disclaimer
Disclaimer 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 r
Slide 4: Agenda
Agenda 1. Key messages 2. 2023 Business Highlights 3. 2023 Financial Results 4. Key takeaways 5. Q&A 4 | 26-03-2024 | © Atos
Slide 5: 01. Key messages
01. Key messages Paul Saleh Atos
Slide 6: Key messages
Key messages 1 Full year 2023 revenue growth and operating margin objectives met: • Organic growth and improved operating margin at Eviden for the full year • Execution of Tech Foundations transformation plan leading to improved profitability and increased win-rates with existing and new clients 2 F
Slide 7: Key messages
Key messages 5 Evaluation of strategic alternatives following end of discussions on potential sale of Tech Foundations and BDS 6 Discussions with banks and bondholders on a refinancing plan to progress within the framework of a conciliation procedure • Targeting a global agreement by July ‘24 • Atos
Slide 8: Full year 2023 operational objectives met for revenue growth and operating margin
Full year 2023 operational objectives met for revenue growth and operating margin FY’23 FY’22 organic growth Guidance FY 23 € million Organic growth Revenue Group 0.1% 0.0% to 2.0% 10,693 0.4% ✓ Eviden 2.0 Acceleration vs. 2022 5,089 2.9% ✓ TF -1.6% Managed decrease 5,604 -1.7% ✓ FY’22 OM% published
Slide 9: Eviden: leading global player providing mission critical IT services
Eviden: leading global player providing mission critical IT services Revenue mix €5.1bn Southern Others 1% 2023 revenue BDS Europe 29% 25% Americas 24% 47k+ Northern Europe Employees Digital Central Europe & APAC 71% 26% 24% 45 Countries of operations Earning trust of our clients +2,100 Patents 20+
Slide 10: Eviden: Distinctive offerings and trusted capabilities
Eviden: Distinctive offerings and trusted capabilities Key offerings Key strategic priorities • Mission critical service operator, modernizing client applications • Digitalization at scale, delivering integrated business & customer service platforms Digital • Thought leader for Sovereignty • Leader
Slide 11: Tech Foundations: Strong client base with long-term relationships
Tech Foundations: Strong client base with long-term relationships Revenue mix €5.6 bn UCC 2023 revenue 7% Others BPO Southern 4% 10% Hybrid Cloud & Europe Americas 48k+ Business Infrastructure 36% 19% 21% Platforms Employees 6% Central Northern Technical Europe & APAC 69 Services Digital Workplace E
Slide 12: Tech Foundations: Leading IT infrastructure player
Tech Foundations: Leading IT infrastructure player Key offerings Key strategic priorities • End-to-end digital orchestrator across the cloud continuum with integrated security Hybrid & Cloud • Autonomous operations powered by AI infrastructure • Transformed go-to market model optimized for next gene
Slide 13: 02. 2023 Business Highlights
02. 2023 Business Highlights Carlo d’Asaro Biondo
Slide 14: Eviden transformation journey continues
Eviden transformation journey continues Continued organic revenue growth ✓ Mid-single digit growth in BDS, led by High Performance Computing and €5,089 m Digital Security ✓ Strong revenue growth of Digital in Europe 2023 revenue ✓ Decline in Americas in H2: ✓ Clients taking longer to decide on discr
Slide 15: Eviden: 100% book-to-bill in Q4
Eviden: 100% book-to-bill in Q4, well-balanced between Digital and Big Data & Security (BDS) 94% ✓ Continuous focus on smaller, low-risk contracts FY book-to-bill ✓ 49% short-term bookings with faster revenue yield ✓ 10% Increase in Win rate for large deals Key Q4 2023 deals Innovation in science Fa
Slide 16: Tech Foundations: delivering on transformation plan
Tech Foundations: delivering on transformation plan Portfolio rationalization driving managed revenue decrease ✓ Deliberate reduction in non-core activities € 5,604 m -1.6% -1.7% (Italy, UCC, VAR) ✓ Contained decline in legacy infrastructure and 2023 Revenue growth in all other business lines -11.4%
Slide 17: Tech Foundations: Q4 book to bill at 117%
Tech Foundations: Q4 book to bill at 117% ✓ Successful renewal and add-on work on top 100 accounts 94% ✓ +110% increase in new logo deals over FY 2023 FY book-to-bill ✓ Win rate at 60% in Q4 2023 (+7 pts vs 2022) Key Q4 2023 deals Digital services company 5-year Hybrid Cloud and 4-year Technology Se
Slide 18: 2023 Group organic growth and revenue by regional business unit
2023 Group organic growth and revenue by regional business unit YoY Organic Growth Revenue Mix Others 3% Southern Southern Americas Europe Americas Europe 23% +3.9% -7.1% 21% €10.7bn Central Northern Northern Europe Europe & APAC Central Europe & +1.3% APAC +2.2% Europe 30% 23% 18 | 26-03-2024 | © A
Slide 19: 2023 Group organic growth and revenue by regional business unit
2023 Group organic growth and revenue by regional business unit YoY Organic Growth Eviden: High single digit growth : Southern • Strong performance of BDS Americas Europe +3.9% -7.1% • Delivery of High-Performance Computers (HPCs) • Growth in Digital led by new customers and strong demand for applic
Slide 20: 2023 Group organic growth and revenue by regional business unit
2023 Group organic growth and revenue by regional business unit YoY Organic Growth General slowdown in market conditions Southern Americas Eviden: Europe +3.9% -7.1% • Comparative effect in BDS with the delivery of an HPC recorded last year • Softer market conditions led to volume reductions in Digi
Slide 21: 2023 Group organic growth and revenue by regional business unit
2023 Group organic growth and revenue by regional business unit YoY Organic Growth Southern Americas Eviden: Europe +3.9% -7.1% • Solid double-digit growth in Digital and BDS Tech Foundations Central Northern • Revenue decline, with lower Europe Europe & APAC activity in Manufacturing and +2.2% +1.3
Slide 22: 2023 Group organic growth and revenue by regional business unit
2023 Group organic growth and revenue by regional business unit YoY Organic Growth Eviden: Southern • Strong demand from Public Sector and Americas solid performance in the Finance Europe +3.9% -7.1% vertical in APAC • Digital activities up high single digit • Lower HPC revenue compared with 2022 du
Slide 23: Headcount reduction driven by change in scope and workforce optimization
Headcount reduction driven by change in scope (-8.4%) and workforce optimization (-5.3%) +14,839 110,797 95,140 -9,331 -15,258 -5,907 Headcount as of Scope Hiring Leavers Restructuring, Headcount as of 31/12/22 dismissals & others 31/12/23 14.5% LTM attrition rate decrease Down year-over year 23 Jan
Slide 24: Operational Takeaways
Operational Takeaways Operate with two separate Strengthen our leadership entities, Tech Foundations position through our world-class and Eviden, within Atos operational execution and new Group through a coordinated offerings deployment sales approach Maintain our recognized Accelerate automation fo
Slide 25: 03. 2023 Financial Highlights
03. 2023 Financial Highlights Jacques-François de Prest
Slide 26: 2023 key financial figures
2023 key financial figures Revenue Order entry Operating margin Free cash flow €10.7bn €10.1 bn €467m €-1,078m +0.4% yoy. organic Book-to-bill 94% 4.4% of revenue €660m restructuring Q4 BtB at 108% +170bps organic €502m lower WCR actions vs 2022 Net loss Normalized Headcount Net debt group share net
Slide 27: 2023 revenue bridge (€m)
2023 revenue bridge (€m) Organic growth at +0.4% 11,341 11,270 +0.4% 10,693 -0.6% -3.9% -1.6% 2022 revenue Adoption of 2022 revenue Scope Foreign Organic FY 2023 (published) new accounting (restated) Exchange Growth revenue treatment (agent vs. principal) 27 | 26-03-2024 | © Atos
Slide 28: 2023 operating margin improvement in both businesses
2023 operating margin improvement in both businesses +170 bps organic improvement vs 2022 Eviden: €294m ✓ OM% at 5.8% up +110 bps organically ✓ Cost take-out actions 4.4% ✓ Improved quality delivery ✓ Better utilization of billable resources 2.7% ✓ Higher fixed costs absorption in Advanced Computing
Slide 29: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 Reorganization -696 -352 Rationalization and associated costs -38 -69 Integration and acquisition costs 4 -30 Amortization of intangible assets (PPA from acquisitions) -108 -140 Equity-based compensation -19 -25 Impairm
Slide 30: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 • €343 m restructuring expenses Reorganization -696 -352 • €353 m separation and Rationalization and associated costs -38 -69 transformation costs Integration and acquisition costs 4 -30 Amortization of intangible asset
Slide 31: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 Reorganization -696 -352 Consisting of: Rationalization and associated costs -38 -69 • € 1,920m impairment of Eviden goodwill • €328m impairment of TF goodwill Integration and acquisition costs 4 -30 • €173 million impa
Slide 32: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 Reorganization -696 -352 Rationalization and associated costs -38 -69 Integration and acquisition costs 4 -30 Amortization of intangible assets (PPA from acquisitions) -108 -140 Equity-based compensation -19 -25 • €36m:
Slide 33: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 Reorganization -696 -352 Rationalization and associated costs -38 -69 Integration and acquisition costs 4 -30 Amortization of intangible assets (PPA from acquisitions) -108 -140 Equity-based compensation -19 -25 Impairm
Slide 34: Operating margin to Net income
Operating margin to Net income (in € million) 2023 2022 Operating margin 467 356 Reorganization -696 -352 Rationalization and associated costs -38 -69 Integration and acquisition costs 4 -30 Amortization of intangible assets (PPA from acquisitions) -108 -140 Equity-based compensation -19 -25 Impairm
Slide 35: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Change in working capital requirement* -391 126 Cash from o
Slide 36: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Capex and lease payments down €-94 million Lease payments -358 -405 • Spent optimiza
Slide 37: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Reflecting an €111 improvement in Change in working capital
Slide 38: Working capital actions
€0.5 billion less working capital actions in FY23 compared with prior year Working capital requirement -€0.5bn Working capital requirement (WCR) Working capital actions • WCR stable at 31.12.20123: at €-0.3 billion, stable 810 compared with prior year 650 • Working capital optimized through: €2.3 bn
Slide 39: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Change in working capital requirement* -391 126 Cash from o
Slide 40: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Change in working capital requirement* -391 126 Cash from o
Slide 41: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Change in working capital requirement* -391 126 Cash from o
Slide 42: Free cash flow impacted by lower working capital actions and higher reorganization costs
Free cash flow impacted by lower working capital actions and higher reorganization costs (in € million) 2023 2022 Operating Margin before Depreciation & Amortization (OMDA) 1,026 1,020 Capital expenditures -205 -251 Lease payments -358 -405 Change in working capital requirement* -391 126 Cash from o
Slide 43: FY 2023 year-end capital structure
FY 2023 year-end capital structure Net cash of €2.423 bn at year-end Net cash, cash equivalent (€2.3 billion) and short term financial assets (€0,1 billion) Net debt: €2,230 million Bonds, bank loan and MTN maturity schedule, € million 1500* Year-end 750 800 leverage ratio: 500 580 350 3.34x 50 with
Slide 44: Refinancing update
Refinancing update • Ongoing discussions with banks and bondholders on a refinancing plan for the Group’s financial debt. • Discussions to be framed under an amicable conciliation procedure in order to facilitate a global agreement by July ‘24. • Sufficient liquidity to operate the business until a
Slide 45: Outlook
Outlook Given current market uncertainties: • FY 2024 guidance will not be provided until a refinancing plan is reached • Withdrawing previously communicated financial objectives for FY 2026 45 | 26-03-2024 | © Atos
Slide 46: 04. Key takeaways
04. Key takeaways Paul Saleh Atos
Slide 47: Key takeaways
Key takeaways • Executing on our transformation plans for Eviden and Tech Foundations • Strategy to leverage offering of both businesses through a coordinated go-to-market approach • Active discussions with banks and bondholders on a refinancing plan to take now place within the framework of a conci
Slide 48: Q&A session
05 Q&A session Atos
Slide 49: Thank you!
Thank you! For more information please contact: David Pierre-Kahn – Head of Investor Relations david.pierre-kahn@atos.net M+ 33 6 28 51 45 96 Atos is a registered trademark of Atos SE. February 2024. © 2024 Atos. Confidential information owned by Atos, to be used by the recipient only. This document