FILE PHOTO: A view of the logo of French IT consulting firm Atos on a company's building in Nantes, France, April 22, 2024. REUTERS/Stephane Mahe/ File Photo
(Reuters) -French IT group Atos reported a decline in its half-year orders and revenue on Friday, hit by subdued commercial activity in France and a challenging market environment, but reaffirmed its sales forecast for the full year.
Atos, which expects to close the deal to sell its Advanced Computing division to the French state in the first half of 2026, has shelved plans to divest its Mission Critical Systems (MCS) business that provides secure military communications, as it aims to benefit from rising defence spending in Europe.
CEO Philippe Salle said on Friday there would "definitely be a lot more orders" for MCS in the future and that discussions with various interested parties were underway but in early stages.
The French state on June 2 formally offered 410 million euros ($469 million) to acquire the Advanced Computing business, which includes its high-performance and quantum computing and AI technologies.
Atos, which unveiled a four-year recovery plan in May, reiterated its revenue forecast of 8.5 billion euros for 2025. It aims to reach 10 billion euros in revenue by 2028.
Its half-year revenue fell to 4 billion euros, from nearly 5 billion a year earlier.
Order intake dropped by around 300 million euros to 3.3 billion, but its book-to-bill ratio improved to 83% from 73% over the same period. A higher ratio indicates greater likelihood of a business covering new orders.
The group said it had streamlined its contract portfolio to limit its exposure to projects with margins below 5% to only three, from seven at the end of 2024.
This narrowed the negative impact on its operating margin to 16 million euros, from 52 million seen in the same period last year.
Atos' net debt rose to 1.68 billion euros as of the end of June. It had a debt of 1.24 billion at the end of last year.
($1 = 0.8747 euros)
(Reporting by Leo Marchandon and Gianluca Lo Nostro; Editing by Matt Scuffham and Milla Nissi)
