Atos Se · EURONEXT:ATO
Atos — Q2 2022 Earnings Presentation
33 slides from Atos's earnings presentation, Jul 26, 2022
Slide 1: H1 2022 Results
H1 2022 Results Bezons, July 27, 2022 © Atos
Slide 2: 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 3: Today's presenters
Today’s presenters Group CFO Nourdine Bihmane Diane Galbe Philippe Oliva Nathalie Sénéchault Group SEVP in charge of Co-CEO, in charge of Co-CEO, in charge of the strategic projects and Group CFO Tech Foundations Evidian perimeter support functions 3
Slide 4: Agenda
Agenda 1. H1 2022 Highlights 2. H1 2022 Financial Performance 3. FY 2022 Objectives 4. Key take-aways 5. Q&A 4
Slide 5: 01. H1 2022 Highlights
01. H1 2022 Highlights Atos
Slide 6: H1 2022 Highlights
H1 2022 Highlights Clear strategy in place, announced at June 14 CMD Going forward: Group fully focused on operations under new leadership team Financing of the envisaged transformation plan successfully secured: an important progress in Atos transformation plan Renewed commercial momentum: strong s
Slide 7: H1 2022 Key Financial Figures
H1 2022 Key Financial Figures Revenue Operating Margin Normalized net income € 5.6 bn 1.1% €-119 m -0.6% yoy, cst. curr. of revenue -2.1% yoy, organic Free Cash Flow Net Debt Headcount €-555 m € 1,792 m 112,180 +2.1% organic 7
Slide 8: Strong sequential improvement in order entry and book-to-bill
Strong sequential improvement in order entry and book-to-bill Order Entry Book to Bill €2.8 bn 101% €2.0 bn Q2 2022 72% Q2 2022 Q1 2022 Q1 2022 Backlog Renewed commercial €22.6 bn traction in Q2 thanks to Backlog at end June 2022 new business lines focus = 2.0 years or revenue 8
Slide 9: Intact ability to attract talents
Intact ability to attract talents Ensuring conditions for H2 revenue growth +16,089 109,135 +742 112,180 (12,370) (1,416) Headcount as of Scope Hiring Leavers Restructuring, Headcount as of 31/12/21 dismissals & transfers 30/06/22 H1 hirings predominantly in offshore and nearshore locations Selectiv
Slide 10: Clear strategy announced at our June CMD
Clear strategy announced at our June 14 CMD Unlocking value by envisaged split into 2 leaders in their respective markets SpinCo (Evidian) TFCo (new Atos) Digital, Big Data and Security Digital Infrastructure and Workplace Leading digital transformation partner Leader in digital workplace, managed l
Slide 11: Financing of transformation plan successfully secured
Financing of transformation plan successfully secured Banks commitments received, covering full amount of financing plan presented at the June 14 CMD Important progress in Atos envisaged transformation plan, demonstrating strong support from banking partners Financial covenant reset at 3.75x net deb
Slide 12: In motion to deliver on our strategic transformation
In motion to deliver on our strategic transformation Main achievements since CMD Clarified Governance Financing successfully secured New leadership team to ensure delivery of our ✓ New financing secured, ensuring strong liquidity strategic roadmap both on performance and throughout the transition pe
Slide 13: Evidian's project: accelerate profitable growth and unleash value creation
Evidian’s project: bring together Digital and BDS expertise to accelerate profitable growth and unleash value creation Dynamic organic revenue growth at Digital BDS +7% CAGR 2022- 2026 12% Develop differentiating offerings and tap fertilization opportunities OM in 2026 c. €700 m Secured cloud Cloud
Slide 14: Evidian in H1: strong book-to-bill underpinning growth acceleration in H2
Evidian in H1: strong book-to-bill underpinning growth acceleration in H2 €2,539 m H1 revenue Digital: robust trends in applications and cloud Growth mitigated by volume reductions and decrease in VAR +2.0% Acceleration expected in H2 underpinned by strong order entry in Q2 H1 revenue growth at cons
Slide 15: Evidian: commercial traction evidenced by high-profile wins
Evidian: commercial traction evidenced by high-profile wins Main wins German automotive Major Pharmaceutical player manufacturer DataSentics Artificial Intelligence Connected Vehicle Software and Machine Learning Factory Asian government MareNostrum5 Big data infrastructure for Edge & Supercomputer
Slide 16: Tech Foundations' project: complete turnaround by 2026
Tech Foundations’ project: capitalize on market-leading assets and skillset to deliver complete turnaround by 2026 Stabilize revenue in 2025 and pivot to REFOCUS RECOVER growth in 2026 Reset cost structure Rationalize portfolio to pave the way for turnaround >600 bps OM turnaround ▪ Reshape the port
Slide 17: Tech Foundations in H1: momentum building up quickly under new organization
Tech Foundations in H1: momentum building up quickly under new organization €3,024 m Strong sequential improvement in revenue growth in H1 H1 revenue More contained decline in infrastructure services thanks to renewed focus -2.6% Robust growth in Professional Services and Digital Workplace H1 revenu
Slide 18: Tech Foundations: commercial traction evidenced by high-profile wins
Tech Foundations: commercial traction evidenced by high-profile wins Main wins Major US Insurer Asian Navigation Company Mainframe Licensing and End to end IT managed services Services Public Central Procurement Global Fast Service Restaurant Agency Chain Infrastructure maintenance and Digital Workp
Slide 19: 02. H1 2022 Financial Performance
02. H1 2022 Financial Performance
Slide 20: H1 2022 Financial overview
H1 2022 Financial overview €M H1 H1 Variation Variation at 2022 2021 constant currency Revenue 5,563 5,424 +2.6% -0.6% Operating Margin 59 302 % operating margin rate 1.1% 5.6% -450 bps -460 bps OMDA 369 633 % OMDA rate 6.6% 11.7% -510 bps Normalized Net income -119 162 Net income -503 -129 Free Cas
Slide 21: H1 2022 Revenue Bridge
H1 2022 Revenue Bridge -0.6% at constant currency In €M: 5,424 +1.6% +3.1% 5,563 -2.1% Q1: -2.4% Q2: -1.9% H1 2021 Revenue Organic Scope Foreign Exchange H1 2022 Revenue 21
Slide 22: H1 2022 Performance by Regional Business Unit
H1 2022 Performance by Regional Business Unit In €M Revenue Operating Margin OM % % YoY H1 H1 @constant H1 H1 H1 H1 2022 2021* currency 2022 2021* 2022 2021* Americas 1,353 1,348 +0.4% 73 159 5.4% 11.8% Northern Europe & APAC 1,625 1,625 +0.0% 28 113 1.7% 7.0% Central Europe 1,258 1,280 -1.7% -30 24
Slide 23: H1 2022 Income Statement
H1 2022 Income Statement €M H1 2022 H1 2021 Revenue 5,563 5,424 Operating margin 59 302 Reorganization, Rationalization, Integration costs -124 -143 Amortization of intangible assets (PPA from acquisitions) -67 -79 Equity based compensation -11 -33 Impairment of goodwill and other non-current assets
Slide 24: H1 2022 Cash Flow Statement
H1 2022 Cash Flow Statement €M H1 2022 H1 2021 Operating Margin 59 302 + Depreciation of fixed assets 135 167 + Depreciation of right of use 192 176 + Net book value of assets sold/written off 5 6 +/- Net charge/(release) of pension provisions -19 -16 +/- Net charge/(release) of provisions -2 -2 Ope
Slide 25: H1 2022 Change in net debt
H1 2022 Change in net debt In €M: (312) (555) (1,792) +219 +82 (1,226) Net debt FCF Acquisitions Sale of Worldline FX & others Net debt Dec 2021 H1 2022 Shares June 2022 25
Slide 26: 03. 2022 full-year objectives & conclusion
03. 2022 full-year objectives & conclusion
Slide 27: 2022 full-year objectives confirmed and refined
2022 full-year objectives confirmed and refined 2022 Full-Year guidance July 27th precisions Revenue growth at constant currency -0.5% to +1.5% Unchanged Operating margin (% of revenue) 3% to 5% Lower end of the range Free cash flow excl. additional impacts from €-150m to €200m Lower end of the rang
Slide 28: Uptick in operating margin expected in H2
Uptick in operating margin expected in H2 thanks to performance improvement plan launched in H1 3.0% to 3.5% Performance improvement plan launched in H1 1.1% - Unwinding of Spring program - Selective hirings - Subcos - Cost discipline H1 2022 Usual Supply chain Incremental cost Cost base Tackling Pr
Slide 29: Free cash flow to improve markedly in H2
Free cash flow to improve markedly in H2, driven by increase in operating margin Main H2 FCF drivers €-555m H1 2022 FCF Uptick in operating margin in H2 H2 OMDA H2 capex and leases H2 seasonal WC inflow H2 WC inflow Conservatively assuming a partial reversal of H1 outflow H2 tax paid H2 cost of debt
Slide 30: 03. Key take-aways
03. Key take-aways Atos
Slide 31: H1 2022 Key take-aways
H1 2022 Key take-aways Clear strategy in place with new leadership team fully focused on customers, employees and execution of Atos strategic project Renewed commercial momentum in Q2 underpinning revenue growth expected in H2 Energic performance improvement measures in place driving significant inc
Slide 32: 04. Q&A
04. Q&A Atos
Slide 33: Thank you
Thank you Atos, the Atos logo, Atos|Syntel are registered trademarks of the Atos group. July 2022. © 2022 Atos. Confidential information owned by Atos, to be used by the recipient only. This document, or any part of it, may not be reproduced, copied, circulated and/or distributed nor quoted without