Atos - comment

Atos has again revised their projections downwards for 2024-2027.   Management are expecting yet lower top-line revenue, driven by underperformance in the BDS segment, coupled with some contract termination and/or lower scope of work in Tech Foundations.  As we have said before, in a company with walking assets, staff and contract losses are almost inevitable through a restructuring. This was further apparent from recent press reports of staff grumblings and contract losses and underpins our view that things will get worse before they get better.   Management expects to turn Free Cash Flow positive in FY26, albeit €215m lower than planned.  

Regarding the financial restructuring, the change to the business plan has no impact.   The voting of creditors is expected on 27th September, followed by the approval of the accelerated safeguard plan on 15th October.   This will lead to the plan’s execution in the following three months, with completion in early 2025.