Atossa Therapeutics, Inc.

Good morning everyone and thanks for joining us this morning. So I'm joined today with Paul who will talk, who will follow me and as well with Nordin and Philippe that you all know who will intervene during the Q&A session. So thanks for all of them to be here today. So I'm going to start to give you a brief introduction. I will then over to Paul as I said to take through you through the group and business performance in the quarter. And then we'll open for the questions. So first of all, a bit some key takeaway. Well, as you know, I just joined recently after 30 years in the technology sector. And I've seen first-hand Atos technological capability, but as well the highly talented team, the leadership and all team across the globe. So since I joined Atos earlier this month, I've been really impressed by the total commitment and dedication of everyone of Atos to deliver the plan every day with clients and their team. So what I did is that I spent time to better understand our operation, first at Tech Foundation with all infrastructure, digital workplace, and all the other strategic services that they do today, but also with Eviden across digital cloud, digital security, and advanced computing. So for me, it is extremely clear that the business has significant opportunity to capitalize on their strong position across many strategic areas that are extremely differentiated and sometimes unique. So obviously, why focusing on the operation performance and commercial momentum? As we already communicated, we anticipate a shareholder meeting to take place early Q2 2024. We have an investor day to occur slightly before. And finally, I want to insist that we are fully committed to an ongoing open dialogue with all of our shareholders, obviously with all of you today. So now let me turn over to Paul, and we will cover the Q3 financial results.

Thank you, Paul. Thank you, Yves, and greetings, everyone. Let me start with revenues for the quarter and year to date. Group organic revenue was down 3% for the quarter, Eviden was up 2.3%, partially offsetting a decline of 7.2% in Tech Foundation. I'll cover the revenue performance and commercial activities of both Eviden and Tech Foundation later in the presentation. Year-to-date group revenue was up 0.6% with a solid revenue growth in Eviden, offsetting decline in Tech Foundations. And for the full year, we remain on track to meet our revenue growth target for the group of 0 to 2%, as well as our guidance for both Evident and Tech Foundation's revenue growth. Turning to our revenue performance by region, Southern Europe was up 3% on solid contributions from HPC and digital security. Central Europe was relatively flat, Northern Europe and Americas were down 2.5% and 13%, respectively, and those reflect the impacts of delays in contract awards. Americas was further impacted by lower volumes in cloud licensing in the U.S. and a tougher comparison with the prior year, which benefited from a large completion of an HPC contract. We expect America's revenue to stabilize in the fourth quarter and be relatively flat compared with the prior year. Revenue breakdown by region is highlighted on the right side of this slide, showing a balanced revenue mix across the regions. Turning now to order entries in the Q3 for the group. And let me remind you that Q1 and Q3 are seasonally low quarters for us. Order entry in Q3 of 2023 was 2.2 billion euros, up 10% over the prior year on a reported basis. Order entry growth would have been higher adjusted for the divestitures. The book to bill in the quarter was 84% compared with 71% in the prior year. And we expect a stronger book to bill in Q4. Total hedge count for the group was 105,000 roughly employees at the end of the quarter which was down minus two percent compared with the end of h1 and our attrition rate was about 16 on a trailing 12-month basis down compared to the end of h1 let me turn now to our q3 performance by business for evident revenue in the quarter was 1.2 billion euros up 2.3% organically, reflecting strong growth in digital security and stronger performance in digital in Europe. The performance in Europe was driven by demand for application development and modernization. In the America, revenue was down, reflecting the impacts of delays in contract awards, lower volumes in cloud licensing, as mentioned earlier, and a tougher comparison with the prior year, which benefited from a large completion of an HPC contract. And as I already mentioned, we expect America's revenue to stabilize in the fourth quarter and be relatively flat on a year-over-year basis. On a year-to-date basis, revenue was up 5.5% organically. Now, evident book-to-bill was 80% in the quarter, in line with the prior year. And as a reminder, bookings are seasonally low in the third quarter, and therefore we expect a rebound in bookings activities in the fourth quarter. In the quarter, the evident business continues to make progress in gaining new logos across all four offerings. Some key wins are highlighted on the slide. They include an application integration contract with a government agency in digital and a large cloud transformation contract with a large luxury retailer. Evident also signed a digital security deal with a major transformation company. And lastly, as we already mentioned, Evident won a contract with the first exascale HPC, which is clearly a testimony of Evident's leadership in advanced computing. Now let me turn to the tech foundations. Revenue in the quarter was 1.373 billion euros, down 7.2% organically and minus 4% for core revenues. The business continues its portfolio rationalization with a reduction in its non-strategic activities including hardware and software resale and BPO. The company recently sold its UCC business, which was declining and impacting year-over-year growth comparisons. Year-to-date revenue was down 3.5% organically and down 1.9% excluding non-strategic activities. Book-to-bill for the tech foundations was 88% in the quarter compared with 58% in the prior year. Tech Foundations added a new logo in the quarter with the major telecom companies in the US. The business will be helping that client modernize its mainframe environment. Other key wins in the quarter, including a contract with the European Commission to support their cloud transformation and automation plans. Tech Foundation also signed a contract with a large gas and electric company. to manage the workplace environment for their 30,000 plus employees. So in closing, we are confirming our 2023 guidance for the group. We would expect growth organically to be 0% to 2%, operating margin of 4% to 5%, and free cash flow for the full year of about $1 billion, and to be precise, $969 which is really implies in H1, H2, excuse me, a free cash flow of flat for the semester. At the business level, evidence is targeted to report an acceleration in organic growth compared with a prior year and an improvement in its operating margin year over year. Tech Foundation is targeted to show core stabilization as the business continues to rationalize its portfolio, and we expect Tech Foundation's operating margin to be targeted to be positive for the year. And with that, we will now open the line for our questions.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for a name to be announced. To withdraw your question, please press star 11 again. Please stand by. We will compile the Q&A. This will take a few moments. And now we're going to take our first question. And it comes from Frederick Boulang from Bank of America. Your line is open. Please ask your question.