French IT firm Atos announced on Monday that it will have reduced cash reserves in the coming years due to a challenging business environment, but assured that this would not affect the core terms of its financial restructuring plan.
Once a leading player in Europe’s software and technology sector, Atos has recently faced severe financial difficulties. The company managed to secure a crucial restructuring deal with banks and bondholders in June, but it now forecasts a revised group revenue of €9.7 billion ($10.72 billion) for the full year 2024, down from the previously estimated €9.8 billion. Atos also expects its operating margin to be lower, at 2.4% of revenue, compared to the earlier target of 2.9%.
The company’s leverage ratio, a measure of debt relative to equity, is now projected to fall below 2.0 by 2027, a delay from the earlier target of end-2026. Additionally, Atos has revised its 2027 revenue and operating margin targets downward.
A court hearing to approve the accelerated safeguard plan is scheduled for October 15. Following this court approval, Atos will implement its restructuring plan, which includes significant shareholder dilution, capital increases, and debt issuance from November 2024 to January 2025.
The company reported a wider first-half operating loss last month, attributing it to impairment charges, declining sales in the Americas, and a slowdown in public-sector orders in Europe. Despite these challenges, Atos remains committed to its restructuring strategy, aiming to stabilize its financial position and return to profitability.
