Atos SE

Thank you for standing by. Welcome to the ATOS Group Q3 2026 performance conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Philippe Salle, Group Chairman and CEO. Please go ahead.

Thank you, operator, and good morning, everybody. So let's go directly to the presentation. I will start with the first two sections, and then I will hand over to Jacques-François. So we start on page six. The key message for this quarter, continued sequential performance improvement. So I will come back, of course, on the revenue and the fact that, as I said, the last quarter we are sequentially, let's say, stable. And, of course, easing, let's say, the comps versus 2025. We confirm also the full year targets. Second, Genesys. We said already in the first quarter that Genesys was stable. In fact, not over, but it was done in terms of the 650 million savings that we have sketched during the CMD last year. We continue. Genesis will be closed, in fact, by the end of the year, and we will reach far above the target of 60 million. Commercial activity, always lower in Q3, and I will come back on this. And then we continue, of course, accelerating in our strategic pillars, and remember that we have three of them. When I go on the key numbers on page 7, so in terms of revenue, so 1.642 billion at current parameters, so it's a minus 2.4%. So we are close, let's say, to a breakeven, and we are very happy, I would say, on this result. Order entry is 1 billion, 62%. So order entry is always lower, in fact, in Q3, just because it's, let's say, the summer season. And remember also that we have two events, let's say, for this order entry. The first one is that it is linked to the renewal of large contracts. 50% of our revenues is managed services. And in fact, usually managed services, it's five to seven-year contracts, usually large ones. But when we have large contracts, like CNF, for example, it's a booking roughly of $300 million, $400 million. So, of course, it pushes us. Very hard, I would say, on the book to build, on the order entry. But in Q3, in fact, we didn't have any renewals. And that's why that, in fact, the order entry was more on not managed services than managed services. So I would say the performance is quite okay because it means that 62% we are above the 50% of not, let's say, managed services. Remember also that there are some contracts where we don't book any order entry, like, for example, EDF or like, for example, the Contracts we have won in the UK with the police because it's what we call framework agreement which means that we have the license let's say to play and of course we're going to play probably for example in the UK we estimate it's 40-50 million per year in fact starting already in fact this year and next year but we don't put any order entry for this contract and that's why I would say of course it lowers let's say the book to bid. Net change in cash, this one also is a very good news, 44 million, and it's the first time since Genesis, and in fact it's the first time when you look back at the company in 22, 21, and we have 50 million of restructuring. Remember, we put 120 of restructuring in H1, so we get 170. We estimate that the total for this year will be close to 200, so it means roughly 30 million more to come in Q4. and then the liquidity at $966 million. Remember that in the liquidity we don't put the 3ZO escrow so it means in fact that the cash is roughly above the $1.2 billion and we are quite confident that we will finish between $1.3 and $1.4 billion at the end of the year. So if we go on page 8 you can see that roughly we have stabilized, and I've said that in fact already since Q1, the revenues. In fact, we don't lose any large contracts in the course of 26. Unfortunately, we lost some of them in fact in the U.S. in 2025, and that's why the comps, of course, is a little bit tough in some countries like in the U.S., but of course it's easing. and in fact it's going to ease even more in fact in Q4 because in fact in the US we will be probably growing in the course of Q4. So as you can see, minus 11 on the first quarter, roughly minus 6 in the second quarter, we are now at minus 2 and we estimate that in Q4 we will be between a 0 and minus 2. If we go on Genesis on the next page, so page 9, so we are, as I say, we are Above the target, we will finish probably close to 800 million by the end of the year. In fact, I have accelerated Genesis just because, of course, the top line was not there in the course of 26. And as you can see, we have done several initiatives in terms of gross offering and simplifications that, of course, we will continue. Just one probably comment, the billability rate. Remember that the goal was roughly at 85. We are now close to 84. and we will touch probably the 85 in the first half year of 27 because we are finishing, let's say, the restructuring next year in Northern Europe and France. If we go on page 10, this is workforce evolution. We are roughly now flat, let's say, quarter on quarter. There are not, I would say, big changes going forward. You can see also that the attrition is around 10%, probably too low for a company like us. But at least, I would say, it's good for us, of course, to keep our, let's say, staff in this moment where we do a lot of change in the company. Now, if I go on the page 11 and the book-to-bill, so as I say, it's 62%. As I say, also, remember, it's low, but there is no, let's say, renewals in terms of managed services. So it's normal, I would say, that we have this, let's say, lower book-to-bill. We estimate that the book-to-bill in Q4 will be above 100. It's always, let's say, higher in the in the last quarter of this year. The qualified pipeline also is very strong and continues to be stronger, roughly at 1.7 billion, I would say, increase in the course of H1. And also the renewal rate also has increased around 93%. After that, you can see some major wins. I talked about EDF. So EDF in the book is zero. Metropolitan police also is zero. It's very close to zero. also some framework agreements we had with HMRC that is also big and again this one on the book to be zero and then you can see other contract wins that we have like for example in Barcelona of the European Space Operator. For the strategic pillars remember that it's Atlantic, Digital Sovereignty and Cyber Security so in Atlantic AI in fact we're going to go over Atlantic we're going to have a big release in terms of our AI let's say Development. It will be Monday next week. It's a suite, in fact, that we're going to launch. It is called Atos Genesis Intelligence, and you will have, of course, more details in the course of next week. But including the AGI, I would say there is a platform called Atos Codex that is very powerful and that we have started to implement in France and in the UK. Digital Sovereignty, just for example, we have also a partner more, I would say, with SAP to be a cloud partner. And cybersecurity, we have launched, let's say, different offers. Just for information on IAM, Intercity and Access Management, Eviden has a solution and we are the only European, I would say, player that has a solution that is really sovereign and secured that we can push against most of the U.S., let's say, most of the competition which is impacted in the U.S. If you look at on page 13, some delivery, some contracts that we have won and also that we are delivering right now, I'm not going to, let's say, review all of them, but you have... Some examples in Germany, in China, in Europe, and of course in France, we see that. Now, at those, so on page 14, on internal adoption of Atlantic AI, we are also, of course, pushing, as you can imagine, Atlantic AI very strongly also in the company. And I will come back, in fact, at the end of Feb, we have a full year results to show you exactly what we do. In fact, Atlantic AI for us, it's two things. It's Agentify, let's say, our back office, so agentic on our own back office, and agentify also our own delivery. This, of course, will be more, let's say, will explain more what we are doing in the, I would say, in the next year, in February, with the full year results. In terms of cyber, you can see on page 15, I put some, let's say, what we are doing in terms of identity, attack, etc. We are also working on the quantum, I would say, response we're going to have in the future. But there is a lot of things that is done right now. And remember, it's a mix between evidence, software, of course, and hardware, and of course, ATOS services. We estimate that... Overall, the cyber revenues is close probably to 1 billion, so it's 15% of our revenues for the company. Let's go now on the operational performance country by country. So first on page 17, you can see the evolution of the revenues. So we start with Q3 last year that we have published. Then you have the divestiture that we have done. Remember that it was Bull and also TAB. and a little bit of Northern Europe, you have the foreign exchange, and then you have, I would say, the Q3.5 at current parameter in the exchange, which is 1683, and then, as I say, now we are 1642, so we are very close, let's say, to next year. We are just missing 40 million, which is roughly 2.4% of organic decrease. Now let's look at the performance country by country. You have here, I would say, the view by GEO, and remember that with Atos we have six GEOs, and also the view of Eviden. As you can see, we are now growing, in fact, in international markets. It's the first time. We continue the growth with UK, and we are also growing, continuing also the growth with Eviden. France is close to the break-even, probably in Q4. and then you have Germany, North America and VNN. Let's look at country by country. So Germany on page 19, so minus 6%. We still have some randoms of clients, in fact, that we have lost in 24 and in 25. And also some clients, like for example, Deutsche Bank that has decided, I would say, to internalize some of the managed services that they have with Atos. So it's not a loss versus the competition. It's just, I would say, some clients we have decided to do internally what they used to do, I would say, externally. So minus 6%, and I would say we are quite stable in terms of revenue when you look at quarter by quarter. When you look at the U.S. on page 20, I think the good news is that we are also stable. We do roughly $96 million per month. between 95 and 96. We estimate that we will continue to do roughly this in the Q4, probably above. And the good news is that last year we were exactly at $96 million per month in Q4. So I would say that in Q4, for the U.S., we will probably be at zero or restart growing as soon as next quarter. So, in fact, we lost a big contract in 2025. Remember that we have decided, I would say, not to renew this contract because of the margin. And, of course, the comparison is still tough. And, of course, it will ease in Q4. And then we can probably, I would say, then restart growing in the course of the year of 27 for the whole year. In France, on page 21, as I say, we are close to breakeven. We have signed a lot of contracts also in France. We see that the commercial development is in good shape. And EDF is a very important contract that we have signed. It doesn't, let's say, give any revenues. In fact, of course, this year and next year. But we estimate that it will start to give some revenues in the course of 28. Now, UK and Ireland on page 22, in fact, The organic growth is a little bit, let's say, we don't grow at 30% in this country. We are roughly at 300 million plus per quarter. Last year, in fact, it was a very low quarter, and that's why the comparison I think for me is a little bit fake. And in fact, when you look at Q4, and they have done roughly a 306 I think last year. We will be probably around this 300 million so in fact we will be close to zero. So it's just for me an effect between Q3 and Q4 and the fact that the base in fact was very low in 25. But sequentially we are around 300 million plus. It depends on the quarter. And of course all the contracts that we have signed will yield in fact more revenue in the course of next year. In terms of international markets, Remember also that we lose also a big client in the banking sector, and we lose it, in fact, not because of Atos, but because also, like in Germany, they have decided to put the managed services internally. So the comparison was tough, in fact, in 25, and it was tough also for the first two quarters of 26. It's not the case anymore, so I think it's great. And now we are seeing some growth. In different areas, in fact, we are seeing in Spain, also in Eastern Europe, and of course in Middle Eastern Asia. Last, Benelux, so Benelux, Northern Europe. This one is a little bit more tricky because also we have exited some contracts last year. It is a week for me, Q3, and I definitely think that it will be much better in the course of Q4. so probably the comparison is a little bit tough for Q3 but I definitely think that we will do better in the coming quarter. Eviden, so Eviden in fact when you look at the numbers it seems that it is decreasing but in fact with the split of bull the comparison in fact is not very fair and the underlying organic growth is 5% so this is a SBU that is growing at a I know and I definitely think that double digit should be the growth going forward. Remember that in Eviden also Middle East has a big impact on us, especially on Vision AI and it's several dozens of millions for us. So we hope, I would say, to recover on this part. I don't know if it will be in 26 or 27, but we know that there is a lot of potential in this region for our Vision AI business We'll see if we can sign some contracts. There is a big one, in fact, that is still waiting, let's say, a signature from one client. We'll see if it's in Q4 this year or it will be in the course of 27. But evident, of course, as you know, with defense, with cyber, there is a lot of, let's say, wind in favor for us. And I think that we will, in fact, continue to accelerate in the coming years. With this, I hand over to Jacques-François for the financial results.

Thank you Philippe and good morning everyone. So, as a reminder, the publication of our quarterly liquidity position is part of the regular reporting requirements which have been defined in the December 24 credit documentation. All the certificates are available on our website. So the key message for this quarter is that we have reached an important milestone with positive cash generation for the first time since the launch of Genesis. The net change in cash, as you can see in the slide, was positive and estimated at approximately plus 44 million euros in the quarter, including a significant restructuring cash impact of around 50 million euros. This reflects the progress made on our operational performance and cash discipline. and reinforces our confidence that we are all well on track to achieve our full year 2026 guidance. This figure excludes several other items that ultimately impact the liquidity position. The exchange rate fluctuation, which amounted to approximately minus 6 million euros, M&A for minus 5 million euros, change in unsolicited payments received in advance of the invoice payment due date during the quarter for minus 10 million euros, Cash movements relating to other financial assets and liabilities for minus 9 million euros. Net fees associated with the successful refinancing of the first lean crunch of the December 24 debt for minus 9 million euros. And lastly, the factoring. The factoring program has improved liquidity by 14 million euros during the quarter. Remember that this program provides a secure and recurring source of funding at an all-in attractive cost of 4.25% plus Euribor three months. It is committed for a duration of three years on a non-recourse basis and it is expected to continue to ramp up in the fourth quarter and beyond. Note that due to the pace of the program ramp up, we did not buy back debt on the market in Q3 and we started to buy some more in the early days of Q4 before our close period started. Taking all these elements together, our liquidity position increased by €18 million in the quarter compared to our post-debt repayment position to an estimated €966 million as of September 30th. This level remains well above the €650 million minimum liquidity requirement under our December 24 credit documentation. So overall, we turned cash positive in the quarter while continuing to fund the restructuring for the Group We strengthened our liquidity position and we are starting to benefit from the progressive deployment of our trade receivable factoring program. That concludes my intervention. I hand over back to Philippe.