French tech firm Atos issues new earnings warning, causing shares to drop

  • Stocks collapse on opening
  • 2021 sales drop 2.4% to € 10.8 billion
  • Operating margin at 4%, lower than the previous target of 6%
  • Warns of negative free cash flow
  • Atos CEO: to announce new strategic plan in Q2

PARIS, Jan. 10 (Reuters) – French technology consultancy Atos (ATOS.PA) issued a profit warning on Monday, its second in seven months, pushing its shares to their lowest level since around mid-2012.

The company’s latest earnings warning also came just days after new CEO Rodolphe Belmer, appointed in October, officially took the reins.

Atos shares plunged 15% at the start of the session.

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Atos said its financial targets announced in July could not be met, both due to delays in agreements with customers and declining margins at its hardware and software resale unit.

“I joined the company last week when it was time to collect and consolidate the numbers. The current state of financial knowledge leads us to the obligation today to issue a profit warning due to the significant deviation of financial KPIs (key performance indicators), ”Belmer said.

“However, most of the elements at the origin of this serious gap are non-recurring … I am convinced that the company has the necessary assets and all the talents to operate a rapid turnaround,” he added .

The tenure of former Atos CEO Elie Girard was marred by accounting errors and a July 2021 earnings warning. Read more

The company’s disgrace saw Atos exiting the French blue-chip CAC 40 stock index (.FCHI) and led to speculation about a takeover or the arrival of activist investors.

Atos said it now expects its revenue to decline 2.4% for the year 2021, to € 10.8 billion ($ 12.24 billion) – below previous forecasts of “stable” sales.

Atos also now forecasts an operating margin of around 4% for 2021 compared to a target of around 6% previously, and its free cash flow target was now expected to be negative at € 420m – below that. a previous forecast of positive free cash flow.

Belmer, who previously headed French satellite company Eutelsat (ETL.PA), said he would present a new organization of the Atos board at the end of next month and a new strategic plan in the second quarter of this year. .

Atos, whose stock had also fallen by around 50% in 2021, will give its 2022 targets on February 28.

($ 1 = 0.8827 euros)

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Report by Benoit Van Overstraeten; Editing by Christopher Cushing / Sudip Kar-Gupta

Our Standards: Thomson Reuters Trust Principles.

Barbara M. Stokes