ATOS: 2021 annual objectives revised downwards

  •   27/07/2021 - 08h04
  •   DEHOUI Lionel

The global economic sector has just closed the first half of the year 2021. The various French and other groups are then taking stock of their activities at the halfway point. In the next few days (precisely 28 July 2021), Atos Group will release its financial results for the first half of 2021. But it has concerns about its performance over this period. It is therefore lowering its 2021 targets as follows.

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ATOS: 2021 annual objectives revised downwards

Atos expects stable annual revenues

The revision of Atos Group's guidance is due to its performance in the second quarter of 2021. Indeed, the group recorded stable revenues at constant exchange rates over this period. On the other hand, organic growth was negative at around -1.5%, due to the accelerated decline in traditional infrastructure activities. All this in an environment of very strong migration to the Cloud after the pandemic period.

It is now clear that this trend in the Group's business will continue in the last half of the year. Atos also saw the rest of its business benefit from the economic recovery. The demand for digitalization has exploded in the second quarter of 2021. As a result, it expectsstable annual revenue growth in 2021 at constant exchange rates.


Atos: new annual operating margin forecast

According to Atos Group's initial forecasts, the seasonality of its operating margin should be more pronounced between the two half-years of 2021. However, the margin rate was lower than the group's expectations for the first half of 2021 as a whole. It is around 5.5%.

The group expects to achieve an operating margin rate of around 6. 0% for the full year. A forecast based on the revenue adjustment for the full year 2021. There will be an impact on the traditional infrastructure business with little short-term cost flexibility.

Under "Otheroperating income andexpenses", the Atos Group recorded several exceptional items. These are mainly asset impairments and provisions for losses. This totalled EUR -160 million in the first half. Cash flow forecasts have also been revised.


Atos: new annual free cash flow target

Atos Origin' s free cash flow for the first six months of the year 2021 was approximately EUR -364 million. This compares with a free cash flow of EUR -172 million for the "first half of the previous year (H1/2020)".

The company's performance at this level was therefore hit mainly by Working Capital Requirement. In addition, the reduction in customer advances was the decisive factor in this financial situation. As a result, the reduction in the use of customer advances is the group's main objective in the coming months.

It now expects a "positive" free cash flow target considering the effects of the lower operating margin target.