(updated with stock market reaction,)
PARIS, July 27 (Reuters) – Atos ATOS.PA said on Wednesday it had “successfully secured” funding for its transformation plan and expects second-half revenue growth to accelerate, boosting its title on the Paris Stock Exchange.
The group is going through a period of turbulence and has struggled to reassure investors in recent months, marked by two changes at its head and the downgrading of its credit rating to BB by the rating agency S&P in mid-July.
The Atos title was up more than 6% in the middle of the morning, outperforming a Parisian market up 0.4% at the same time, but was still down nearly 70% since the start of the year. .
The IT and cybersecurity group reports in its press release on the results of the first half of a “sharp improvement in commercial dynamics”, illustrated in particular by the strong increase in the ratio of orders to sales, to 101 % in the second quarter, compared to 72% in the first quarter.
“This ramp-up in commercial momentum (…) demonstrates strong support from Atos customers for the envisaged transformation plan, with more than 0.6 billion euros in new orders signed after its announcement”, is it specified in the press release.
Atos announced almost simultaneously last month a plan to split its activities before probable disposals and the departure of its CEO, Rodolphe Belmer, leading to a new movement of mistrust on the stock market.
➦ Atos split plan and CEO departure spook investors
Atos also reports negative free cash flow in the first half of the year, at -555 million euros, and expects it to remain in the red for the full year, “at the bottom from the range of -150 million euros to 200 million euros, excluding additional impacts of the envisaged transformation plan”, which are “estimated at around -250 million euros, including the cost of financing”.
If the group therefore plans to burn nearly half a billion cash in 2022, “the free cash flow, excluding the additional costs linked to the transformation plan, should improve very markedly”, with the significant recovery of the operating margin expected in the second half.
Atos has maintained its revenue growth target for 2022, between -0.5% and +1.5% at constant exchange rates and targets an operating margin for the year “in the lower range of 3 % to 5%” previously defined.
The group also underlines in its press release that the financing of its transformation plan has been “successfully secured”.
“The transition period is now fully funded, and the group’s liquidity is significantly strengthened,” it said.
The group has received the commitment from the banks on a term loan of 1.5 billion euros and a revolving credit facility of 900 million euros, and specifies that “the final documentation should be signed in the coming days” .
When announcing its transformation plan in June, Atos announced disposals of non-strategic assets for a value of around 700 million euros, of which 480 million have not yet found takers.
The group has already sold its 2.5% stake in the payments company Worldline WLN.PA as part of this disposal plan, which enabled it to raise 219 million euros.
(Written by Myriam Rivet, edited by Nicolas Delame and Kate Entringer)