France's Atos sees sales at loss-making unit bottoming out in 2024

FILE PHOTO: The logo of Atos is pictured at the Eurosatory international defence and security exhibition in Villepinte, near Paris, France June 13, 2022. REUTERS/Benoit Tessier/File Photo

PARIS (Reuters) -Atos, the struggling French IT consulting firm planning to split into two listed entities, said it expected sales at loss-making unit Tech Foundations to hit bottom in 2024.

The firm, which will hold an investor day on Wednesday, said Tech Foundations - which groups its legacy IT consulting activities - would generate about 5 billion euros ($5.3 billion) in sales in 2024 and aimed to return to growth from 2026.

Home to assets deemed strategic by the French government, Atos is striving to regain investor confidence after several setbacks, heavy losses and sharp stock swings precipitated by governance instability that led it to propose a split-up plan.

That will see it separate Tech Foundations from Eviden, which groups Atos' most coveted assets such as cybersecurity division BDS and supercomputers.

Tech Foundations' operating margin is expected to reach between 6% and 8% in 2026, while free cash flow before interest and tax is expected to turn positive in 2025 and be higher than 250 million euros in 2026, Atos said in a statement.

Co-CEO Nourdine Bihmane said on a call with reporters that the split-up plan was "on the verge to be completed in the main countries".

He also said plans to sell 700 million euros of assets, deemed crucial to finance the company's turnaround plan, were "almost completed".

About 20% of that 1.2 billion-euro turnaround plan, which entails laying off about 7,500 people, has been achieved, he said.

($1 = 0.9359 euros)

(Reporting by Mathieu Rosemain;Editing by Sudip Kar-Gupta and Mark Potter)

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