Atos SE

Before we get started, I'd like to draw your attention to the disclaimers on slide two. On the call with me today is Carlo Di Saro-Biondo, our Group Chief COO, and Jacques-Francois Duprest, our Group CFO. For the agenda today, I'll share key messages related to our first quarter of 2024. and some updates on the current discussions with our financial creditors for a refinancing plan. Carla will cover in more details our performance in commercial activity for Evident and tech foundations, and Jack Francois will go over the refinancing discussions. Then we'll take your questions. So now let's turn to key highlights for the first quarter of 2024. Group revenue for the first quarter of the year was 2.5 billion euros, down 2.6% organically year over year. The revenue decrease reflects a continued market softness in Americas and in the UK for evident, and we're seeing also lower scope of work with certain clients in Americas and Central Europe for our tech foundations business. Order entry was 1.6 billion euros for a book-to-bill of 64%. Evident book-to-bill was 83% compared with 79% in the prior year, driven by stronger demand and high-performance computing. Tech Foundation's book-to-bill was 47% compared with 68% in the prior year as clients delay contract decisions. Regarding the group profitability, operating margin was 48 million euros in the quarter representing 1.9% of revenue. Our cash position was a billion euros at the end of the first quarter, reflecting primarily a 1.3 billion reduction of working capital actions compared with the year end December 2023. Our net debt position was 3.9 billion euros at the end of the quarter. As was already communicated last month, we've opened an amicable conciliation procedure, which is with the aim of reaching a refinancing plan with our financial creditors by July 2024. And that is done with the framework of a conciliation process. And discussions with our banks and bondholders are ongoing. And the implementation of a 450 million euro interim financing plan is in progress now based on current market conditions and business trends we're working on updating on updating our 24 to 27 business plan and that should lead to an increase in of the parameter of cash needed to fund the business into a potential additional reduction in total debt we will communicate any changes to that business plan and to the refinancing parameters to the market in the coming days. As a result also of this work, we decided to extend to May 3rd the refinancing proposal deadline in order to allow all stakeholders time to incorporate new information, again, that we'll be sharing with the market in the coming days. Our plan is to evaluate all the proposals that will be submitted on the 3rd of May under the ages of the conciliator, Maître Hélène Bourboulou, and we'll discuss them with our creditors, and then we'll decide on the best path forward. Our objective remains to reach a refinancing agreement with our financial creditors by July 2024. With that, I want to just turn now the call to Carlo, who will comment on our first quarter performance.

Thank you, Paul, and good morning, everyone. I'd like to go now into more details about Q1 performance.

Group revenue was 2 billion 479 million euros, down 2.6 organically compared with Q1 2023. Evidence revenue was 1 billion 164 million euros, and decreased by 3.9% organically, reflecting continued softwares in America and in the United Kingdom. Tech Foundation's revenue was 1,314,000,000 euros and decreased by 1.5% organically, reflecting lower scope of work with certain clients in America and Central Europe. Regarding our commercial activity, order entry for the group was 1 billion and 586 million euros for a book to build of 64 percent down for 73 percent in q1 2023 reflecting delays in concert awards as clients await the final resolution of the group's refinancing plan evident order entry was 966 million euros leading to book to build of 83 percent compared to 79 percent in prior driven by improved commercial activity in high-performance computing. Tech Foundation order entry was €620 million, for a book-to-bill of 47%, compared with 68% in prior years, as client delay contract decisions, particularly in public sector, as we said before. Regarding profitability, group operating margin in the fourth quarter of 2024 was €48 million, representing 1.9% of revenue, compared with 3.3% in prior year. Evident operating margin was 22 million, or 1.9%, down 330 basis points organically, reflecting revenue shortfall and lower utilization of billable resources. Tech Foundation operating margins were 26 million, or 2%, up 50 basis points organically, reflecting the continued execution of our transformation plan. Let me now comment evident commercial activity. Evident book to bill was 83% and improved by four points compared with the same quarter last year. Order entry was particularly strong at BDS, which recorded a book of bill of 104% with three large high-performance computers orders. I would like to focus on them. First, we have signed a new contract with the Danish Center for AI Innovation, owned by the Novo Nordisk Foundation, and the Export and Investment Fund of Denmark to construct a state-of-the-art AI supercomputer. The supercomputer is designed to cater to large-scale projects that utilize AI and prioritize the highest level of security to support Danish data sovereignty. The new HPC is expected to be one of the most powerful AI supercomputers in the world, and its goal is to accelerate research and innovation in various fields such as healthcare, life science, and the green transition. We have also been selected by several French public administrations to provide a major extension to the capacity of the Jean Zay supercomputer. This announcement marks a new step towards sovereign AI in France and is funded by the France 2030 program, which was announced by the French president. The third HPC contract signed during the Q1 concerns the capacity extension by four times of the Santos Dumont supercomputer. securing the computer's rank as the most powerful in Latin America for academic research. These significant wins illustrate the unique combination of our expertise in HPC, AI, and cybersecurity, which offers unparalleled advantages with best-in-class cooling technologies, advisory on AI computing design, data science on use cases, and expertise to design, build, deliver, and operate. On the side of digital deals, a contract with the federal office in Germany by using Red Hat technology, the authority is significantly accelerating its digital transformation process. The products and services meet all ethical law requirements, in particular security regulations. A second contract, another one, with the European Parliament to implement and maintain a SAP-based financial information system.