ATOS DID NOT ACHIEVE ITS 2021 OBJECTIVES, THE TITLE FALLS
PARIS (Reuters) – Atos fell on the Paris Stock Exchange on Monday, reaching a low of nearly ten years, after revealing preliminary financial results for 2021 below its targets presented last summer due to several non-recurring effects.
The action lost 17.39% to 31.88 euros at 10:20 am, the lowest since June 2012. This is by far the biggest drop in the Stoxx 600, which fell at the same time by 0.18%.
The group reported unaudited annual revenue of around 10.8 billion euros, down around 2.4% at constant exchange rates, while it said it expected on stable revenues.
For its part, the operating margin rate stands at around 4% of turnover, against a target of around 6%.
These deviations from the defined objectives are explained in particular by an unforeseen increase in costs linked to a financial services contract in the United Kingdom, project delays from the end of 2021 to 2022 and postponement of final agreements to 2022, Atos explained in a statement.
In addition, free cash flow is in the order of -420 million euros, whereas it was expected to be positive.
“The major variance relating to free cash flow results essentially from the working capital requirement,” explained the new managing director, Rodolphe Belmer, who took office last week.
DRIVERS OF RECOVERY
The former boss of the satellite operator Eutelsat replaced Elie Girard after a black year for Atos, hit hard by the pandemic, the discovery of “internal control weaknesses” in two of its subsidiaries in the United States and a warning last July on its annual results which had led it to lower its 2021 forecasts.
“I am convinced that the group has the necessary assets and all the talents to recover and transform quickly”, assured Rodolphe Belmer on Monday.
He added that at the end of February he would present to the board of directors a new organization, and in the second quarter a plan “which will detail the engines of this recovery”.
JP Morgan, “neutral” on Atos, expected a backlash on the stock market given the lower than expected annual results and uncertainty about medium-term forecasts.
Analysts at the American bank anticipate downward revisions to the consensus for 2022-23 which could occur once the orientations and objectives of the group are revealed.
Atos, whose stock has fallen by around 50% in 2021, will provide its 2022 targets on February 28.
For their part, analysts from Midcap Partners say they stay “away from the case” and wait for the presentation of the strategy in the second quarter, judging the group’s service offer still “inadequate”.
(Written by Myriam Rivet, Blandine Hénault and Laetitia Volga, with the contribution of Piotr Lipinski, edited by Marc Angrand)