BENGALURU: Atos has issued a profit warning following a reassessment of the cost of a financial services BPO contract and project slippages due to supply chain challenges. It caused the company's share price to slump.
Rodolphe Belmer, CEO of the French IT services company, said, “I joined the company last week, at the time when the figures were being collected and consolidated. The current state of financial insight leads us to the obligation to issue a profit warning today due to the significant variance in the financial KPIs (key performance indicators). However, most of the items underlying this severe gap are non-recurring. In particular, the large gap in free cash flow mostly stems from working capital."
Belmer said he was convinced that the company has the necessary assets and all the talents to operate a swift turnaround. "In this context, I will present at the end of February a new organisation to the board of directors, and in Q2 a plan that will demonstrate the drivers of this turnaround and the focus on profitable growth and value creation,” he said.
Atos recorded €10.8 billion in revenue last year, a decrease of 2.4% at constant currency. It said the unexpected reassessment of the cost to go on transformation, re-platforming, and operations of a financial services BPO contract, signed in 2018 for 15 years with a large UK financial institution, led to a major revision of the completion rate on the project, at the end of December last year, and therefore translating into a negative revenue impact last year. It impacted the full-year revenue growth by 70 basis point.
Big Data/HPCs and unified communications and collaboration project slippages from the end of 2021 to 2022 due to supply chain challenges as well as to customer postponements in the public sector and defense in the Netherlands and the UK impacted full-year revenue growth by 90 basis points.
"Delay to 2022 of final agreements with several large customers to get compensated for extra work performed in 2021. These amendments, expected to be signed in December, would have led to additional revenue in 2021. Impact on full-year revenue growth: 30 basis points,” the statement said.
