Atos' cybersecurity unit drives sales ahead of split
By Mathieu Rosemain
PARIS (Reuters) -Struggling French IT consulting firm Atos posted higher-than-expected quarterly sales on Thursday, driven by its cybersecurity and digital transformation unit Eviden, as the group continues to work on its costly split-up plan.
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.
The recent withdrawal by Airbus, the world's largest planemaker, from a plan to buy a minority stake in Eviden leaves Atos looking for other strategic partners as it seeks to firm up the financing of its transformation plan.
"(This) has clearly dampened the sentiment around the stock and investors are understandably keen to get clarity on interest from potential suitors," Citi said in a note prior to Atos' quarterly update.
Eviden groups Atos' most coveted assets such as cybersecurity division BDS and supercomputers, fuelling speculation about interest from other players in the cybersecurity field, such as Thales. Thales' CEO reiterated last month he wasn't interested in Eviden.
First-quarter revenue was up 2.8% from a year earlier to 2.81 billion euros ($3.11 billion), beating the analyst consensus provided by the company.
Eviden, which the group plans to spin-off by the end of the year, posted 9.5% growth in sales on an organic basis to 1.33 billion euros, offsetting a 2.6% drop in sales at Atos' loss-making Tech Foundations IT consulting legacy activities.
Yet the group said its "book-to-bill" ratio, which helps investors evaluate the outlook for tech companies, only marginally improved in the first quarter, coming in at 73% compared to 72% a year ago.
Shares of Atos, which used to be part of France's blue-chip CAC 40 index, have recovered some losses since the start of the year, but are still down almost 50% over the last 12 months.
The group confirmed its full-year targets.
Atos said its much-expected shareholder meeting would take place on June 28, amid strong criticism from some investors of board chairman Bertrand Meunier.
($1 = 0.9047 euros)
(Reporting by Mathieu Rosemain;Editing by Uttaresh Venkateshwaran and Mark Potter)