France’s Atos Expects to Burn Close to Half a Billion Euros in 2022

by cloudnewsmag

PARIS (Reuters) -Loss-making French IT consulting firm Atos reported first-half sales in line with expectations but said it would burn close to half a billion euros in 2022 as it adopts a transformative turnaround plan to restore investor confidence.

First-half sales fell by 0.6% in constant currency terms from a year earlier to 5.56 billion euros ($5.64 billion), in line with a median estimate of 5.52 billion from 10 analysts canvassed by the company.

The group burnt 555 million euros in the first half and said it expected to burn up to 450 million euros in the full year, thanks to the improvement of cash flow generation in the second-half.

Like other peers, Atos faces high levels of employee turnover and wage inflation which weigh on its margins. It is also dealing with the consequences of its slower move to cloud computing-related services as compared to some rivals.

The first six months of the year were particularly turbulent for the group formerly headed by the European Union industry’s chief Thierry Breton, as it went through two governance reshuffles and a painful downgrade of its debt to junk status by ratings firm S&P.

Belmer said he would leave the group on the day Atos presented its plan to split the company in two groups, with the aim to spin off and combine its most juicy assets, including its cybersecurity division BDS.

Dubbed Evidian, these operations combined generated 4.9 billion euros in revenue in 2021, up by 5% from the previous year, and an operating margin of 7.8%.

The other entity is set to include its declining and loss-making IT infrastructure management services, which had sales of 5.4 billion euros last year.

The group had initially said that the sale of 700 million euros worth of non-core assets would finance that plan. It still has to find buyers for 480 million euros worth of assets.

(Reporting by Mathieu Rosemain; Editing by Kim Coghill and Stephen Coates)

Copyright 2022 Thomson Reuters.

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