Information Technology
Market Update - April 9
Paris, France – April 9, 2024 - Further to its press release dated April 2, 2024, and as part of the discussions initiated by Atos SE with its financial creditors under the aegis of the conciliator appointed on March 25, 2024, Atos SE presented its updated business plan and the parameters of its refinancing framework to its financial creditors on Monday April 8, 2024.
2024-2027 business plan of the Atos Group
Atos SE provided key strategic and prospective financial information about the Group's 2024-2027 business plan, the details of which can be found on the Company's website .
The 2024-2027 business plan has been analyzed by the independent consulting firm Accuracy.
Key highlights 2024
The Group 2024 revenue of €9.9 billion represents an organic revenue evolution of circa
-2% compared with 2023:
Operating margin of €0.4 billion or 4.3% of revenue:
Free cash flow after interest and taxes of €-0.4 billion excludes the full unwind of the working capital actions of circa €1.8 billion, as of December 31, 2023, which will be covered from cash on the balance sheet.
Free cash flow after interest and taxes for 2024 based on the Accuracy analysis is expected to be €-0.6 billion.
Key highlights 2027
The Group's revenue of €11.4 billion in 2027 represents a revenue CAGR of +3.1% over the 2023PF - 2027 period, in line with the market and reflects a recovery in commercial activities starting from the end of 2024.
-1.9% over the 2023PF - 2027 period.
The Group's operating margin of €1.2 billion in 2027 represents 10.3% of revenue.
Free cash flow after interests and taxes of €0.5 billion in 2027 reflects a €0.9 billion improvement compared with 2024 from:
Group Free cash flow after interest and taxes based on Accuracy analysis is €0.3 billion in 2027.
The evolution of the Group's revenue, operating margin, and free cash flow is summarized in the table below:
Free cash flow may vary based on interest expense related to the new refinancing solution. Please refer to the disclaimer in this press release.
Parameters of Atos' refinancing framework
As indicated in its press release of March 26 , 2024, Atos SE has entered into an amicable conciliation procedure in order to frame discussions with its financial creditors. This is to facilitate the emergence of a global agreement regarding the restructuring of its financial debt within a short and limited timeframe of four months, which could be further extended by one month if needed.
In this context, Atos SE presented on Monday April 8, 2024 to its financial creditors the Company's key parameters of its refinancing framework, which included:
These parameters are based on the Group's current perimeter, which includes the assets of Eviden and Tech Foundations without taking into account the impact of any potential asset disposals.
These parameters act as guidelines for all interested parties who will ultimately present their proposals to the company and the conciliator.
The Group's refinancing framework aims to achieve the following objectives:
The main figures of Atos' financial debt and the coming maturities of Atos SE's borrowings are detailed in Appendix 1 of this press release and in the presentation.
Interim financing
Atos has reached an agreement in principle with a group of banks and a group of bondholders regarding an interim financing in the amount of €400 million, consisting of:
In addition, provided the Group's financing banks grant a waiver, the French State has agreed in principle to extend a €50 million loan through the FDES (Fonds de Développement Economique et Social) to a subsidiary of Atos, Bull SA, which controls sovereign sensitive activities. This loan shall be reimbursed in full at the closing of the refinancing.
Atos will commit, in return, to sign an agreement at the level of Bull SA for the benefit of the French State which together with the issuance of a preferred share ( action de préférence ) by Bull SA will give the French State protection rights on such sovereign sensitive activities, under a legal documentation to be finalized. This agreement in principle provides for a right for the French State to purchase sovereign sensitive activities if a third-party has acquired 10% or a multiple of 10% of Atos' share capital or voting rights and Atos and the French State have not reached a reasonable agreement on how to protect national interests in relation to these sovereign sensitive activities (without prejudice to the application of the French FDI regime). It also provides for governance rights for the French State at the level of Bull SA (with no voting rights at this stage).
With these new facilities, Atos believes it has adequate liquidity until its long-term refinancing plan is set up.
Next steps and refinancing discussions' process
Existing stakeholders of Atos SE and third-party investors can submit proposals for new money by April 26, 2024 in order to allow a global agreement on the new capital structure of the Company to be finalized by July 2024.
Atos will evaluate all proposals, under the aegis of the conciliator Maître Hélène Bourbouloux in the best corporate interest of the Company including its employees, clients, suppliers, shareholders, and other stakeholders, while maintaining an attractive business mix. Atos will also take into consideration the sovereign imperatives of the French state.
Atos will inform the market in due course of the progress of the refinancing discussions, which will result in a change in its capital structure arising from a final global refinancing agreement, including the potential issuance of new equity which will result in a dilution of the existing shareholders.
Shareholders and financial creditors will be consulted in compliance with French legal requirements.
*
Atos SE confirms that information that could be qualified as inside information within the meaning of Regulation No. 596/2014 of 16 April 2014 on market abuse and that may have been given on a confidential basis to its financial creditors in the context of the presentation held on Monday April 8, 2024 has been published to the market, either in the past or in the context of this press release, with the aim of re-establishing equal access to information relating to the Atos Group between the investors.
***
Conference call
Atos' Management invites you to an international conference call on Tuesday, April 9, 2024 at 08:00 am (CET – Paris) .
You can join the webcast of the conference:
https://register.vevent.com/register/BIbb8cac21bc124265adae510d10eeb672
Upon registration, you will be provided with Participant Dial In Numbers, a Direct Event Passcode and a unique Registrant ID.
During the 10 minutes prior to the beginning of the call, you will need to use the conference access information provided in the email received upon registration.
After the conference, a replay of the webcast will be available on atos.net, in the Investors section.
Appendix 1
The debt structure of the Group as of 31 December 2023, taking into account drawings on the remaining available RCF (drawn in January 2024) is as follows:
(1) Pro Forma €320M RCF draw and maturity extension of Term Loan A to January 2025
(2) Excluding accrued interest on LT Borrowing
Note: the €1.5 billion term loan A, maturing in July 2024, provides for another 6-month extension option until January 2025 available to Atos SE under standard conditions (notably no event of default and payment of an extension fee); it should be noted that under French law, any events of defaults triggered by the opening of mandat ad hoc or conciliation proceedings are considered void.
The debt principal schedule of the Group from 31 December 2023, taking into account drawings the remaining available RCF and assuming TLA second extension option exercised would be as follows:
Maturity Profile of Gross Debt as of 31 Dec. 2023, Pro Forma(1)
(1) Pro Forma €320M RCF draw and maturity extension of Term Loan A to January 2025
Appendix 2 : expected guarantee needs
Appendix 3: FY23 actual – FY23 proforma revenue and operating margin reconciliation
The tables below present the reconciliation between the FY 2023 actual revenue and operating margin and the 2023 pro forma revenue and operating margin, for the Group, Eviden, Tech Foundations and the two components of Eviden, Digital and BDS. Elements in reconciliation correspond to businesses disposed in 2023.
(in € million)
Appendix 4: Free cash flow reconciliations
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 risks and uncertainties are linked to factors out of the control of the Company and not precisely estimated, such as market conditions or competitor's behaviors. Any forward-looking statements made in this document are statements about Atos's beliefs and expectations and should be evaluated as such. Forward-looking statements include statements that may relate to Atos's plans, objectives, strategies, goals, future events, future revenues or synergies, or performance, and other information that is not historical information. Actual events or results may differ from those described in this document due to a number of risks and uncertainties that are described within the 2022 Universal Registration Document filed with the Autorité des Marchés Financiers (AMF) on April 21st, 2023 under the registration number D.23-0321 and within the 2023 Consolidated financial statements published by Atos SE on March 26, 2024. Atos does not undertake, and specifically disclaims, any obligation or responsibility to update or amend any of the information above except as otherwise required by law. This document does not contain or constitute an offer of Atos's shares for sale or an invitation or inducement to invest in Atos's shares in France, the United States of America or any other jurisdiction.
This document includes information on specific transactions that shall be considered as projects only. In particular, any decision relating to the information or projects mentioned in this document and their terms and conditions will only be made after the ongoing in-depth analysis considering tax, legal, operational, finance, HR and all other relevant aspects have been completed and will be subject to general market conditions and other customary conditions, including governance bodies and shareholders' approval as well as appropriate processes with the relevant employee representative bodies in accordance with applicable laws.
About Atos
Atos is a global leader in digital transformation with c. 95,000 employees and annual revenue of c. € 11 billion. European number one in cybersecurity, cloud and high-performance computing, the Group provides tailored end-to-end solutions for all industries in 69 countries. A pioneer in decarbonization services and products, Atos is committed to a secure and decarbonized digital for its clients. Atos is a SE (Societas Europaea), and listed on Euronext Paris.
The purpose of Atos is to help design the future of the information space. Its expertise and services support the development of knowledge, education and research in a multicultural approach and contribute to the development of scientific and technological excellence. Across the world, the Group enables its customers and employees, and members of societies at large to live, work and develop sustainably, in a safe and secure information space.
Contacts
Investor relations : David Pierre-Kahn | investors@atos.net | +33 6 28 51 45 96
Individual shareholders : 0805 65 00 75
Press contact : globalprteam@atos.net
1 Ratio net debt pre-IFRS16 over EBITDA pre-IFR16; EBITDA computed as OMDA pre-IFRS16 minus anticipated RRI (restructuring, rationalization, interagtion) costs and Other changes
2 Investors - Atos
3 Please refer to the disclaimer of this press release
4 Please refer to the disclaimer of this press release
5 CAGR : Compound annual growth rate
6 PF : Pro forma
7 ratio net debt pre-IFRS16 over EBITDA pre-IFR16; EBITDA computed as OMDA pre-IFRS16 minus anticipated RRI costs and Other changes
Attachment
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti