Good afternoon, and welcome. I'm Marie de Scorbiac. I'm the new Head of Investor Relations and CSR for Atos Group. It's great to see so many people here today. I also want to welcome those of you who are joining online. We are delighted to share an update of our strategic and transformation plan for the next 4 years.
And the entire leadership team is here today with Philippe Salle to present that plan. You will receive a comprehensive series of presentation. And at the end of the session, you will have the opportunity to ask questions. Behind me, you can see on the screen the disclaimer. Let's hope we can all take it as read, and I don't have to go through all of it. Now the real important part of the presentation starts. And before I welcome Philippe on stage, let's watch a short video of what Atos is about.
[Presentation]
So good morning -- good afternoon, sorry, day was long. Good afternoon, everybody, shareholders, bondholders, banks, financial analysts, industry analysts, Board members and of course, the -- what I call the leaders teams of the group, the top 20 people who are going to run not the show with me tonight, part of it, but the company, which is, I think, more important for the coming years. And I would say, delivering the plan we're going to explain today.
So I'm very glad that to have all of you, I would say, today. And we're going to have different topics. I will start with the first topic, which is a stronger group in a growing market. It's just talking about the market and what is, let's say, Atos, sometimes people say to me, we don't know exactly what you do. So I will try to explain what kind of services we provide.
And then in fact, after this session today, you have in what we call the [ BT ] a lot of different demos, if you want to stay after in the different services we have, so you can understand what is Smart platform, what is digital application, et cetera. Then after that, I will share with you the -- what we -- I would say, the shared ambition of the group, so our ambition, what we want to be for the next 4 years and of course, beyond. After that, I will detail the focus plan that we have. And then there will be different also people who are going to intervene.
Jacques-Francois, the CFO, will then touch about the financial and extra financial, of course, trajectory, but the financial for Jacques-Francois. And I will wrap up with 2 or 3 slides and of course, take all the questions in the room and of course, online for the people who are online. So let's start with the stronger group in a growing market, what is Atos today.
So just as a reminder, I give you the -- everybody, I think, knows the numbers, the '24 key numbers on the left. So EUR 9.6 billion revenues, roughly EUR 200 million of operating margin, so roughly around, let's say, 2%, 74,000 employees, and we are operating in 68 different countries. Now you can see also on the slide what are the different services that we provide.
It's a little bit in advance what I'm going to say after, but it was difficult for me to say, I put you the old, I would say, structure and then we will switch to the new one. And then I will come to that. You have, of course, the percentage. So you can see also on geographies. The #1 market is the U.S.A., around 20%. #2 is Germany, also around 20%. Then you have France, a little bit below. International market, which is the rest of the others, so -- the rest of U.K. Top 5, let's say, U.K., Ireland, Belgium and then international is the rest. So in international markets, you have Latin America, Africa, South Eastern Europe, Middle East and Asia.
And then in terms of industry, you can see public sector and defense around 26%, 27%. It's roughly 6%, 7% in defense, around 20% in public sector. Then financial services and insurance, manufacturing, less than 20%; technology, media, telco, healthcare and then I would say, resources and services. If I go just one-by-one on the business line, just to give a flavor, I would say, of what we are providing in types of services.
I'm not going to read everything, but I would say it's just -- and then you can review after the presentation that will be on the website. This is exactly what we do. So we call that Cloud & Modern Infrastructure. Remember that cloud was on Eviden before. Infrastructure was on the older Tech F. we decided to call it, I would say, C & MI, excuse me. And then you can see that we do, of course, infrastructure transformation, migration, of course. We migrate from, I would say, mainframe to cloud, public, private cloud.
We do all type of, I would say, cloud infrastructure. We, of course, manage also on-premise. We have data centers, et cetera. So that's roughly 24% of our revenues. Of course, it encompasses, I would say, the cloud from Eviden and the infrastructure from Tech F.
Second one is Cyber services, around 10% of revenues. So we -- of course, we do testing, advisory. We do also threat-based management detection, et cetera. So we have, I would say, a specialized team that goes to clients, give, of course, I would say -- see exactly, I would say, their situation in terms of security and of course, after that, put the right measures, I would say, to ensure that there is the right level of security.
Digital workplace, around 10% also. So this is really, I would say, managing material supply and procurement of the workplace, I would say, devices, but we do more than that. We do, of course, a 24/7 support. And that's why we have different, I would say, back office in different regions in Mexico, in Europe and also in Asia.
Digital applications. So it's more the part that we are developing custom applications for the customer. So it means that they don't choose to have an ERP, which is more smart platforms that we're going to see. It's more, I would say, choosing an ERP on the shelf, and we are, of course, installing, I would say -- tailoring, I would say, the ERP to the need of the customer.
Then data and AI, as you can see, a very smaller piece. I said this morning in the press that we are not late versus the competition, but we are small, but the competition is nowhere also for us. So we definitely think that there is a lot of, I would say, opportunities for us. But we need to catch for sure now, I would say, this data.
And that's why I have decided to have now a VP, EVP of this business line. Smart platforms, this is the ERP. So we implemented, I would say, the ERP. So excuse me, digital was not ERP, Smart Platform is ERP. And there are two ERPs where we are very strong, SAP and ServiceNow. And then we have what we call regional offers. So we still do some VAR, maintenance services and also some consulting, for example, in the U.K. and Netherlands. I will come back to Eviden after that.
So that's roughly what is Atos today. Now we operate, of course, in a market that has a lot of shifts today. Technology shift. I think that there is nothing new for everybody. The first one, of course, AI, everybody speaks about AI. Although I can say probably most of the people do not understand exactly what is AI because they tend probably to, I would say, not differentiate between machine learning, I would say, and really AI, what is probably LLM.
Then you have, of course, the data. A lot of companies have, I would say, data. Some -- most of them, in fact, don't know exactly what to do with it, to extract them or to manage them. Cloud, of course, is a big issue for, I would say, a lot of our customers. They have mainframes or they have, I would say, their own systems on site, and they want to switch, I would say, to the cloud. And of course, security, which is, of course, probably a big concern for the CEOs, I would say, worldwide because we know that any company is not safe.
Everybody can be attacked, personally, in fact, in your car, in your home and of course, in any company in the world. So that's, I would say, the technology. So cloud, data, of course, security and AI. Demand, of course, I would say, from our customers. The first one is the consolidation of the supplier pool. So we are big customers. We want to deal with less and less, I would say, suppliers and providers.
The second one, of course, is that there are stricter, I would say, criteria on the request of the RFPs with ESG, of course, right shoring, smart shoring, so offshoring for some of them, but some of our clients, like the public sector do not want us, I would say, to offshore outside of Europe when we, of course, work for public sector in Europe.
So that's why we need to do nearshoring in Eastern Europe. And then, of course, sovereignty that is coming up, especially, I would say, in Europe. And that gives for us, I think, and for Atos, a big opportunity because we are a European player for sure, headquartered, let's say, in Europe.
And then ecosystem shift is just to say that, of course, some of our competitors are changing a little bit their scope. And in fact we see that, I would say, different players, I would say, attacking us or attacking the market that, of course, we need to compete against in the future. So that's roughly the shift that we see in terms of technology demand and competition.
Now when we look at the clients, what they see or what they want or what they are looking at, first, they witnessed some escalating, I would say, IT cost a lot and probably the most part coming from the software vendors in the last years. I think the -- I would say the inflation coming from COVID was probably a big opportunity for some of them. And in fact, I think everybody has witnessed a very high surge in terms of pricing.
Of course, data-driven. As I say, a lot of companies have data. Sometimes they don't know exactly how to -- what to do with them, what kind of value they can extract, I would say, from this data. Aging IT stack, it's true for some of our clients, typically, for example, the banking sector, the insurance sector, where they have, I would say, very legacy and older systems, but tricky, I would say, to touch it, of course, because you never know what happens when you have millions of clients, maximize, of course, the employee experience and customer experience. Security, as I say, it's a big concern for everybody, compliance and of course, consolidation of IT system.
When you do M&A, of course, what you want after that is to make sure that you have only one system to maintain and operate, and not different, I would say, a piece of software. Now the market where we are playing, I think probably it's not a new number for you. So we play in a giant market, EUR 1.3 trillion size. And I will talk about the growth after that. So as you can see, of course, EUR 1.3 trillion compared to the size of Atos, it's, I would say, probably too big for us.
When we look at where we are strong in terms of area and when we are strong in terms of, let's say, segments or industries, we are addressing a EUR 400 billion market, which means that we have roughly 2% market share. And that's why I said to the team at 2%, don't complain, we cannot grow because, in fact, in front of us, the market is so huge. As you can see, of course, the growth of the market comes from, I would say, the cloud, the data, the cyber, where there are, of course, a big, I would say, double-digit growth.
In terms of geographics and geographies, it's more Europe and North America. And as I said -- industries, we say there are some industry that are, in fact, growing faster than others. When we look at growth, so this, I would say, was done by Gartner. So you can see what was the growth. So probably, let's say, modern growth in '22-'25, '25 probably is not as expected probably from a lot of people.
When I see, in fact, also the guidance from the competition, we see that the market is still soft, and we are, in fact, facing this soft market. Atos is a little bit different because we are suffering, of course, from, I would say, loss of contracts in '24. So we compare, I would say, of course -- the comparison for us is a little bit difficult. But I would say the good news for us is that it's on a softer market that will pick up.
And I definitely think, of course, that this market will restart growing. And we estimate Gartner, not us, that I would say the growth is around 8% per year. That's why, in fact, in our plan, we put 5% to 7%. I see some comments this morning saying I'm completely crazy, probably.
But the question is that, in fact, we grow below market. So probably we can say also it's not very ambitious because finally, the market is at 8%, and you can probably do better than that. So that's what I would say happened, let's say, on the market. Just for your information, a very nice picture.
So the market was growing around 2% to 4%. And for Atos, it was minus 3%, minus 2.5% for the reasons that you know, of course. Management distraction for me was probably the big one. The separation between Tech Foundation and Eviden, of course, has taken a lot of time. I would say the staff was more internally, I would say, focused than externally focused. The financial restructuring, of course, some of our clients decided, I would say, not to renew some contracts because they were afraid that probably we will not be there or alive in '25. And of course, a limitation, I would say, when you look at the different segments that we have, we are more -- we are stronger, I would say, in low-growth segments and probably weaker, in fact, in high growth, I would say, segments.
All these, I would say, factors explain why I would say we have not been growing at market rate for the past 3 years. But we have a set of strengths. So that's, I would say, the power of this company. As you can see, first, we have a very good workforce. I toured the world, I went from the U.S., India, was in Singapore, most of the countries in Europe where we are. And definitely, I see a lot of, I would say, experienced staff, engineers, a lot of people that are committed to the company.
And I think it's a very -- I would say, it's a good strength. We are local. We have a global delivery, but we also have a very strong local presence in the different countries where we are. Customer-centric, probably not the biggest strength, but definitely, it's going to come. And in fact, Clay is going to talk about clients this afternoon. We have an amazing base of customers.
And we have, I think, probably a lot of our competitors who should be jealous on the basis -- on the base of the customers we have on the span in the different sectors. We don't probably have the share, I would say, of wallet in this customer that is enough. But in fact, we have the doors open. And definitely, I think, that there is a lot of opportunity for Atos.
We have, of course, technical depth, CSR, expertise and of course, sovereign player for Europe. We are a European player, and we can, of course, answer most of the requirements from, I would say, companies or public sectors that are looking for sovereign companies. We are also endorsed by analysts. There are some of them in this room. So I'm not going to list everything, but we are considered a leader in different areas by Gartner, IDC, iSG, et cetera.
And we are also trusted by the leading partners, so the hyperscalers, of course, SAP, et cetera. So we have different partners where we work with them. And of course, that recognize also that we have some knowledge, knowledge that they can push with us, I would say, to jointly, let's say, attack some clients. We -- just for information in Europe, I give you -- we work, in fact, as I say, we have a very span -- large portfolio of clients.
As you can see, for example, we have put some examples. I'm not going to be, I would say -- but for example, in financials, you can see that we work on the 15 of the top 20 banks in Europe, 6 out of the 10 healthcare company. Of course, we are #1 in the public sector, telco, 7 of the top 10 clients in Europe; and energy, 5 of the 10. So we have really, I would say -- the right, I would say, to work with these customers.
And now the duty that we have is to make sure that we're going to have a bigger share in the future. So what clients expect from us? So I've been interviewing probably like 50 clients since I took as Chairman first and then CEO. So the first one, of course, is expertise. They want people that are experts in their domains in cyber, in cloud, et cetera.
So we can, I would say, have an exchange, reinsure them when they want to switch, for example, to cloud, when they want to put security. Proactiveness, this, I definitely think it's one of the weakness of Atos. We are not proactive enough. They want us, in fact, to come and say, we have different types of solution or we can probably do something different.
They want to have, let's say, a dialogue on an expertise level that is very important. Transformative, of course, is just to make sure, I would say, we accompany our clients in their journey of transformation because a lot of companies right now are putting a lot of money in digital transformation.
And combinatory, it means that we have also external partners that can bring, I would say, with us some solutions for the customers. So that's it for the first part about the market. So I would say, overall, it's a big market, growing market. We are quite, I would say, lucky to have this. And Atos has, I would say, the strength, I would say, to rebound on this market. Before we continue, I'm going to show you a small video on one client testimonial.
[Presentation]
So that's exactly what I say. A lot of our clients have legacy systems that are very old. sometimes their volume, of course, are popping up, and it's difficult for some of the system, of course, to cope, I would say, with the increase of their volumes. So that's a big opportunity for us.
So let's now switch, I would say, to the part #2, which is the shared ambition. So I'm going to tell you exactly what is -- what we want to be recognized as Atos.
In a nutshell, we want to be a global AI-powered technology partner shaping, secure end-to-end digital journeys. And I will come back, I would say, to the key words of this sentence. Global first, some -- I see some comments in the press saying that we will probably, I don't know, sell U.S. or we don't need to be in the U.S. or stay in Europe. I think it's a big mistake as a global or international player, we need to be in the different regions of the world.
And if we want to talk also to some of the hyperscalers or I would say, software vendors that are in the U.S., it's impossible to do that if you are just a European player. So we need to stay global. So Atos will continue to be a global company.
So global, why? Because, of course, you strengthen the global partnership. You have, of course, economies of scale, so you can invest in technology. You come, of course, the preferred vendors. If you are too small in terms of size, some of our customers, in fact, will put us as, I would say, rank #2 in terms of supplier that we don't want.
As I say, with economies of scale, we can invest in R&D, but we can also decrease the G&A, so be more efficient. And of course, we have also the cost efficiencies in our delivery system. So global, I think, is very important. And the decision we have taken, supported by the Board is to stay global.
The second one is a technology. I think to probably differentiate from the competition, it's very important that we push, I would say, the technology side. I definitely think that sometimes we are too weak in this one. Some of our competitors are very good, in fact, in BPO, in time and material. But I would say for us, that's not exactly where we want to play. We definitely think that we are a technology company, and we want to invest in technology. The first thing, of course, is that we're going to hire a CTO, who should arrive in -- after the summer. I cannot tell you the name for the moment.
But it's somebody also that is going to look at, I would say, the span of R&D that we have and then decide with the different strategy of the business lines and country where we need to invest in terms of R&D projects. And also, we want to invest in R&D because we want to show to the clients that we are differentiated, I would say, from the competition in terms of technology.
For this, we're going to invest roughly EUR 500 million in R&D over the next 4 years. So it's roughly around EUR 100 million this year and up to EUR 150 million in 2028. The idea also is to make sure that we pick the right project. I think we are too spread in terms of R&D today. So we need definitely, I would say, to have less projects, but with more impact in the future.
And for that, I need somebody to conduct this. And then we will continue -- we have, I would say, a program of investment with start-up that is very little. But definitely, I think it's great for a group like us to open also to the start-up ecosystem to take shareholding if we want in some aspects, for example, in cyber, it could be or in data or AI. The idea for us, of course, is to find people that are a little bit different from us that can bring to us a different kind of solutions. And of course, that can after that strengthen the position of Atos in the future. So technology, we are a technology company. Secure, now I'm going to hand over to Pierre, who is going to talk about cybersecurity.
Thank you, Philippe. Welcome -- very glad to welcome you all in -- again from my part. So my name is Pierre-Yves Jolivet. I'm the Head of refocused Eviden, which is about hardware and software products, including cybersecurity products as well as leading the overall cyber activities for the group. I'm a recent joiner to Atos. So I'm very glad to be able to share with you my fresh experience about the great teams we have, great products we have and the major projects we deliver to our clients.
So we have talked a lot about digital transformation. We know now that there is no digital transformation without a strong investment in cybersecurity. It has been known for years, especially during COVID, which with working from home being something exposed the IT systems of the companies to a wide breadth of attacks.
It is true also in 2025, which is "normal year for cybersecurity." We still see 15%, 1-5, 15% increase in the number of attacks and 25% for ransomware. And it will stay true in the decade to come with the investment on AI-powered applications in all the IT systems of our clients, which lead to new threats around the data security. So cybersecurity is a submarket that we expect to grow faster for the global IT services. And what do we do?
What do we do at Atos in cybersecurity? I will start at the bottom of the page with one number, EUR 1 billion in the revenues in cybersecurity, which is 10% of the group. It's a higher intensity of cybersecurity compared to most of our competitors. And it's split in basically three parts. At the bottom is all that we do embedded into the projects that all the other business lines of Thales of Atos are delivering. The part is specifically on Cloud & Infra.
On Cloud and Infra, we are -- when there's a big project of migration to cloud, we will also supervise the workload of the client. It also can happen on digital workplace. When we deliver digital workplace, we deploy and we deploy endpoint detect and response tool to manage these applications.
So that's big part of what we're doing, approximately EUR 500 million. The other part of what we are doing is about best-in-class cybersecurity services that we deliver to clients that ask for a specific RFP in cybersecurity. This is more and more the case. And here, we offer an end-to-end portfolio of activities, which go from training and advisory to detect and response to installation of cybersecurity products.
What is important is that these two blocks, they are delivered by the same teams. And so we can manage across synergies and efficiencies across these teams. They are organized both in a local way with 16 security operation centers, but also through global delivery centers, one in India, one in Europe and one in the Americas. And in these global delivery centers and globally in these teams, you have 6,500 cyber employees with 1,000 working to supervise, to manage the security of our clients 24/7, which is a very unique asset for this importance.
And it explains also why we are recognized as a leader in worldwide in cybersecurity and specifically as the #1 in managed services in Europe for the cybersecurity of our clients. Speaking of Europe, I would like to draw attention to one part of our portfolio, which is a bit less known that we have a EU-sovereign cybersecurity suite of products.
So the cybersecurity product market is very wide, and we are focusing on very one part, which we think is one of the growing submarket, the data protect part where we do a suite of products that allows you to control your data from data encryption, ID and access managements to allow you to access this encrypted data and digital identity to allow you to prove that you really are who you say you are on the digital world and you can have the right to this one.
Data protection is one of the fastest-growing subsegment of the cybersecurity market. And with renewed focus of Europe on sovereignty, especially sovereignty in tech, we expect this activity to grow faster than the market and to gain market share on our competitors. So what do we do with our clients, great project, I talked about great projects. It's important that we -- you see that we have not -- we have been investing in AI for cybersecurity. We do cybersecurity of AI, but we also use AI for cybersecurity to better serve our clients. You have here three -- four examples, four illustrations of clients, three of them working on AI.
So Siemens Government Technologies, which is operating in the U.S. as all companies supporting government these days, they are submitted to a lot of geopolitical threats, especially complex attacks. We use here AI in our AI threat engine to be able to detect the weak signals of an attacker trying to get into an IT system and to block them before they do any harm.
For Eurocontrol, that was a client you heard the great testimony a few minutes, you -- with the cloud and infrastructure business line, we have embedded AI capabilities in our own platform. We use our own managed detection and response platform to support this client and to reduce the detection and response time, the reaction time when there is a cyber threat. So cybersecurity, we talk a lot about technology because we love that.
But as we all know, in the cybersecurity process, the human part is sometimes weak link. And here also, the AI-powered applications can help ensure that there is compliance.
And so that's the third illustration that we do for NTT Comware where we use GenAI as a virtual assistant to make sure that it's easy to respect the compliance process and that the identity and access management is well deployed. So three illustrations on AI. For cybersecurity, AI is important, but AI is now the future of cybersecurity. Future threats is also about the advent of quantum computing, which was a threat on the encryption.
And thanks to our expertise, we are developing post-quantum crypto resistant in our cybersecurity products, but also helping our clients to prepare an architecture of cybersecurity that will be resistant to this advent of quantum computers. So for clients, I think, all they have in common, they cover the world. They are all very demanding clients, operating in critical infrastructures.
And we are deploying with them the leading-edge products and solutions. Now it's great when we tell you how good we are and how great the clients we work with, but it's even better when you hear it from the mouth of the clients. So as you know, Atos has been working with Olympic Games for a long time and up to the Paris Olympic Games of 2024. And so you will hear now Tony Estanguet talking about how is it to work with Atos on cybersecurity.
[Presentation]
So great customer feedback from Tony Estanguet. Just wanted to give you also a few numbers to back that and to give you a measure of what it is to protect the Olympic Games in terms of cybersecurity. So it's not 2 weeks or 3 weeks or 4 weeks actions. It's actually a 4-year project working together with the International Olympic Committee, working together with the French National Cybersecurity Agency.
And in terms of number, it's 55 billion of cybersecurity alerts of -- which is 25% more than last Olympics. So the threat is not going anywhere. Out of this 55 plus billion alerts, you have 1,000 potential cybersecurity incidents that have been investigated. But at the end, as I'm sure all of you have been able to see -- enjoying the Paris Olympic Games, there was zero incident impacting the Paris 2024 Olympic Games, neither on TV, neither on Internet, neither when you were going through electronic gates to go to the stadium.
And it's a true testimony to the ability of the Atos cybersecurity teams to manage these major projects, to manage -- to work closely with the client. And as a conclusion, if I wanted you to take three things out of what I've said about cybersecurity at Atos is one, that we have very strong assets to be able to capture the growth in cybersecurity.
Two, that we work very closely with all the other peers and bringing this into all our clients; and three, that with ability to deliver major projects that we have just seen, is a key differentiator for cybersecurity services, but also for the broader services of Atos. Thank you very much.
Thank you, Pierre. So you have probably witnessed that Pierre was working with Thales, and that's why there was a slight change, but it's normal when you spend some years in the company, then after that, it's difficult to switch to another world.
So I'm finishing, I would say, the ambition. So we were in global technology and secure, now end-to-end. So end-to-end, as you can see, when you look at the different phase for a customer between advise, build, integrate and operate, you can see that we have roughly all the different business lines that can address the different phases of a customer with digital application, as I say, Smart platform, et cetera. You can see on the left that there is also tech consulting where we are very weak on this one. We are a small player, in fact.
And that's one of the questions we're going to answer in the coming months whether we want to be reinforced in consulting, I would say, to address the problems of the CEOs. So to have, I would say, a dialogue with CEOs that are more, I would say, at a high level than directly, I would say, going business line by business line and having, I would say, technical discussion.
So end-to-end is very important, and I think we are quite a unique player, I would say, to have that kind of span in terms of services. Now we can switch to the plan of '24 -- excuse me, '25-'28.
So for the next 4 years, we have a clear vision, and I'm going to go, I would say, all the phases. So we're going to Simplify, Orchestrate, TRIM and AI-enabled. The AI, in fact, in the Vision is not touched because I'm going to touch it in this section. So first, Simplify. So remember what was Atos last year, Tech Foundation with the different business line, Eviden. So Tech Foundation is dead today. It doesn't exist anymore. And now we have two brands in the group. So at the top, you have Atos Group, which is really the brand for the group level, roughly finance, legal, HR at, I would say, worldwide level, let's say, several hundreds of people.
And then Atos is the brand of service and then Eviden becomes the brand of products, hardware and software. And then you have the consulting, of course, where we can consult, I would say, the different worlds. Now if I go a little bit deeper in Atos and Eviden. So in Atos, you see the six business lines that I have talked about, cloud and modern infrastructure, cybersecurity, data and AI, digital applications, smart platforms and digital workplace.
Now for Eviden, we have four business units. We call that business unit because they have their P&Ls. It's advanced computing, it's mission-critical system, cybersecurity products, so the software part or the hardware part and Vision AI, it's also a company where we use -- we are working, I would say, with airports and putting AI on cameras to detect, for example, if there is something happening in the crowd or in the different areas of airport or a train station.
So Atos 6 -- and if you look at the EUR 9.6 billion of sales of '24, Atos is roughly EUR 8.5 billion, Eviden is EUR 1.1 billion, okay? So Atos is the service part, big part, of course, the big chunk of the company and Eviden is the hardware and software part. So it means I'm going to, of course, put the teams together, the cloud from Eviden and the hardware, I would say, when you look at the hybrid, we say Hybrid Cloud and Infra and of course, the cloud of Eviden is now one business line, which is, of course, Cloud and Modern Infrastructure.
So we're going to have -- we're going to stop having people fighting against each other in clients because it was the case. So the people from Eviden saying we are the future, the people of Tech Foundation say, no, we are not dead yet, et cetera. So this will simplify, I would say, the proposal that we give to the clients.
In terms of simplification, the number of countries. So we have four big countries, U.S., Germany, France and U.K. So France now you have only one Head of France. When I say one also, it doesn't manage any longer, I would say, Spain, for example, or Morocco. I want -- I would say, the managers to focus, I would say, on their zone and to make sure, I would say, they are pushing very hard.
Germany, Austria, a little bit of Eastern Europe also because the nearshoring of Germany is in Poland, a lot of it, let's say. Then, of course, United Kingdom and North America. Belux, Netherlands and Nordics. In Nordics, it's mainly, I would say, Sweden and Denmark. And then international market, which is all the rest, okay?
And as I say, international market is Latin America, Africa, Spain and Switzerland, some Eastern Europe, Middle East and Asia. We're going to exit from several countries. So I had a question this morning from the press, what does that mean Salle, I cannot say, unfortunately, because we are still negotiating with different, I would say, people in the company. But the idea for us, of course, is to reduce the number of the span of the countries, and we don't need to be in 78 countries for this -- I would say, for this company to be stronger. So there will be closure or sale in the future, so in the course of '25 and of course, of '26.
Simplification, again, also, it was a matrix organization before between BLs, business lines and geos. So we have decided, I would say, that now the P&L and the cash is managed by the geos and the BLs focus more, I would say, on portfolio, R&D, marketing, of course, recruiting, making sure also we have the right skills at the right level, I would say, in the different countries. So it changed a little bit, I would say, the way Atos was structured.
Lean governance, I don't like headquarters. When I say I don't like the bigger, they are usually the more intrusive, they are with, I would say, the different geos and BLs so I like to be lean at the top. To have, I would say, more strategic headquarter and then, of course, to push the decision at the geo and business line level or at Eviden level.
Portfolio. So we -- when I arrived, we were -- I think we had like 170 offers. So we are back to 40. And out of the 40, we're going to push more 20 offers in the different business line. Just I would say, to simplify also, I would say, the discussion we can have, I would say, with customers. And then focused partnership also, we have decided not to be the partner with everybody. So we're going to decide also which partners we're going to push more in the future.
And again, as I said, play with them to, I would say, hunt for new clients or push our market share in the different clients. So that's the S, the Simplification.
Orchestrate. So Orchestration is more organization and, of course, the operating model of the company. As I said, there is a new team. So that's what I call the leadership team, so the top 20 and then you have the management team, the top 200 that in fact, they will be tonight there. I will pass also the key message of this, I would say, strategy tomorrow morning. So you can see in blue with Atos, you have the six head of countries, the six business line and Frederic, the Global Delivery Center.
So we have one head of the different, I would say, offshoring in the world from the U.S., so from Mexico, in fact, some, of course, in Africa, in Eastern Europe and in Asia. On the right, you have Eviden with Pierre-Yves and Emmanuel in charge of Advanced Computing. And on the top, you have the people from Atos Group. So of course, CFO, HR, Growth with Clay that is coming to make a presentation, Frederic on IT, Alexa on Partnership and Cécile on General Secretary.
Just for information, these 28 are new, in fact, in this team coming from outside or have been promoted. So they were not part of this team 3 months ago. So we are, I would say, changing a little bit, I would say, the team to make sure we have the right people delivering, I would say, on the strategy that we have decided to focus.
I'm not going to spend too much time, I would say, then I would say, on the operating model. We are finishing it. It will be completely live, I would say, by June this year. But we're going to focus on two different topics now. The first one is growth, clients and the second one is HR. But let's, I would say, start with growth, and I will give the floor to Clay, the Chief Growth Officer.
Thanks, Philippe, and good to see some familiar faces I noticed in the crowd. So I'm the Chief Growth Officer. I've been with Atos for 9 years. The first 7 of them are -- almost 8, I ran geos, so major geos, so the U.K., Northern Europe, APAC and Central Europe. I'm also the exec sponsor on quite a few of our customers. So I've got a pretty good sense of what it takes for us to satisfy those customers.
There's three things that we need to do to grow. So we have to retain our existing customer base, and we have to expand inside those customers. We have to win new large revenue streams. And then we have to get ourselves ready to go and fulfill and deliver on the high potential offerings out there like data and AI plus the modern offerings in cloud and cyber, okay?
Today, I'm going to talk about four things. I'm going to talk about our portfolio, combined with our customer base. And then I'm going to highlight what the recipe for success looks like on top line and commercials. And then we'll go into how we're going to go and do that, and we'll hear a little bit more from one of our customers, similar to the Eurocontrol model.
So starting off, we've got a good solid base, right, in terms of customers and offerings around the digital workplace, around infrastructure and around applications. So we have a good thing to build on. It's a little bit different. It's tailored by geography. So we do really strong in Financial Services and Infrastructure in APAC, for instance, and with the state departments and with health and applications in North America.
And then Europe is a little bit different. Europe and the U.K., we're particularly strong in what I call Critical National Infrastructure. So leveraging the local presence we have with the nearshore, with the offshore. So things like energy and utilities, public sector and defense, transport, you get the general picture. But the key thing in satisfying our customers as we go forward is to build on those services and wrap in the new high potential services, scalable services that are out there.
So make our infrastructure services more palatable, more successful by integrating AI in them to make them stronger. And the same thing from an application, we need to wrap in cyber and have our advanced cyber solutions part of those application services. And then we've also got to get our customers ready to run data and AI apps to run LLM apps and operations as part of this. So that's the promise in the next step.
Okay. Just a bit about our customers. So our customers -- almost -- our customers are almost partners when you look at the numbers. So we've got several hundred partners that we happen to combine to provide services to transform the experience for their customers. As evidenced up there, we've seen a growth in the retention rate, something back to where we were before over the last 6 months that's highlighting that partnership. However, in delivering that partnership, there's so much more we can do. So we've talked about six business lines just in Atos and excluding the Eviden side for a second. And yet in our biggest customers, we only do 1.6 of those business lines into each of those customers as we sit here today.
So that's the real opportunity for Atos, but it's also the opportunity for those partnerships, customers that we have going forward is to bring more to bear to them. Okay, so I'm going to touch a bit on the what, and then I'll go into the how, okay? So the recipe for success is really clear. So we've got to retain and grow. So we have to retain our customers similar to the rates that we did before 2024, which is about 92%. And then we have to expand the services that we have in with them, right?
So to be a better partner with our customers, we have to go and sell more into them to help them with their transformations. So we got to bring data and AI, and we got to go apply it to the infrastructure services similar to what we heard from Eurocontrol earlier. We have to bring the cyber, and we got to bring it into the apps and have it be apps native in order to make not only those core services more valuable, but also to help them with their own transformation for their customers.
Second thing, we have to win between 5 to 8 new large revenue streams. This doesn't have to all be new logo, but sizable new revenue streams every year. So we've already done three of them this year, right? So we know we can do it, and we did 11 just in our infrastructure and digital workplace business in 2023. So we know it's possible, but we have to do 5 to 8 every year. So that's the second platform, bring some new revenue streams on from delighting that new set of customers or new revenue streams inside the same customer.
Then we have to live up to the potential and support of our customers of the new HiPo services, right? We have to bring in data and AI operations. We have to bring in LLM operations. We have to make that and integrate that into their ways of working in order for them to be successful for their customers. And you'll hear some of that actually in one of the customer testimonies later.
Okay. That's the what. Now let's talk about the how. And some of this even I forget because I'm just too close to it, quite frankly. So the very first thing is we have a common integrated model across the globe that we've established. So across all of the business lines, across all of the geographies so that we can bring a real coherent set of services and offerings to our customers, and we bring them in an integrated fashion versus the two streams that we had previously.
So if we look how that applies to our existing customer base, so it applies to our existing customer base quite simply because today, we only -- or for the last couple of years, we've only sold digital cyber, right? And apps into digital cyber and app customers. And we only sold infrastructure and digital workplace into infrastructure and digital app customers. I mean -- and so now as we brought this organization together and that reunification, you've doubled your customer base that you've got to offer your offerings to.
So right away, there's a big upside that comes from that. But it's all pivoted and oriented towards the client partners under this model. So there's a single individual that owns the relationship for an account, supported by an executive sponsor that is responsible for bringing all the services together and sharing them with the customer, our existing customer base. And then in turn, really as a byproduct of that, we get growth, right?
So by helping our customers transform, by bringing the full weight for the customers, you just get that growth that I talked about, that 10% on the -- 10%. And it's really -- it's about EUR 3 billion of cross-sell, upsell we do today. So we're saying by 2028, we're going to do another 10% beyond that.
Then we have to go deliver those 5 to 8 deals. So one part of it is actually relatively straightforward. So for the last few years, we have not pursued large deals, by and large, in the digital, cyber or cloud spaces. A corporate decision a few years back that wasn't a priority. So we're changing that because there's plenty of large deals, particularly in the application space that we should be going after.
So that is we immediately expanded the scope to go help deliver those five. But the second thing is we're then applying the methodologies that we've used previously for origination. So the biggest challenge in the large deals is that we have to originate more deals. So working with our advisers, working with our internal business developers, working with our industry heads, our geo heads to be able to go and identify those opportunities. Our win rate with them historically has been one of the strongest parts of Atos. So we know if we get the right pipeline, we've got a very good chance of winning it from a large deal perspective. It's just a question of securing that pipeline.
Third thing, we have to support the acceleration of and the commerciality and deployment of the high potential offering. So data and AI, data and AI apps, right, but also the cloud business and cyber businesses. So what are we doing about that? So the first thing is we have a dedicated team under Alexa's leadership that's focused on how do we best do this with the hyperscalers and some of the other partners, SAP, Dell, so forth and so on. But the other thing is we're making a new investment in sales specialists.
So these are individuals that are just focused on selling these next-generational services. And we also make sure that each of them have 1 or 2 qualifications and orientation towards an industry because it doesn't really make sense just to have generalist, sales specialists to be cognizant and be proficient in data part of the business or SAP, you've got to be aligned to a particular industry.
So data and AI apps in manufacturing, data and AI apps in finance, and that's one of the big bets that we're making to see how we can go and accelerate that. Then there's three things we're doing that are more orthogonal across all those streams. So the first thing is cleaning up the accountability model. So we did a survey, and we looked at, okay, what -- if we look at the roughly 1,000 people that have some way or shape or form that are tied to our go-to-market, what are the responsibilities? And we found many of them had a slice of up to 30 pieces that they were accountable for, making it very difficult for them to be accountable for anything, truthfully.
So we've simplified that, aligned our people against those streams we just looked at. So we have a population that's around the retained cross-sell. We have a population that's around the large deals, and we have a population that's around the new HiPo services. And we've aligned a new incentive scheme against that because it's different in how you want to compensate and incentivize a large deal maker that takes 18 months than it is for someone a sales specialist doing a HiPo that's typically 90 to 120 days to convert.
Then we're bringing AI into everything. And I mean we're probably at 2 out of 10 for where we'll be in 2 or 3 years. But we brought it into the solutioning. So it helps us actually design the solutions upfront, right? So we have a library, the data -- the AI helps us apply the library against the particular offering and the situation. But the most straightforward one, which actually seems like it should have been obvious is we use it now to review the quality of our bids because often in these bids, they're relatively large bids.
There's hundreds of pages and all it takes is one place where you screwed something up by accident and guess what? Your bid has been knocked back. And we're doing the same thing on pricing. So we're integrating some of the external pricing we get from Everest and other benchmarks that we can apply in there so that we can use that to help discriminate more on our pricing, but also to make sure that it's competitive.
And finally, many of you that who've known Atos for a while know, we've had a few bad contracts. So we've established a common governance that's focused with a common set of Ts and Cs, that's approved by the financial leadership and Philippe to make sure that we don't create that next set, right, including things that have been a real problem like indexation. So we had a number of contracts where we had to give them productivity gains of 4% every year, but we didn't have an inflation clause, right? Not a great combination. So we've done something globally to go do that.
So now we're going to pause just for a second, and I'm going to let you hear from a #1 of our customers that talks a bit about our partnership.
My name is Jane Possell, EVP and Chief Information Officer for CNA Insurance. Atos has been providing CNA with end-to-end infrastructure, digital workplace, service desk and major incident management services since 2018. The insurance industry is built on trust. Clients expect fast, seamless service when buying policies, submitting claims or seeking support. Downtime or data loss can quickly erode trust and damage a company's reputation.
One of my job priorities is to ensure the CNA infrastructure is not an impediment to our business operations, that it's always available, flexible, secure and resilient. Atos is instrumental in helping CNA meet this objective. Specifically, I wanted to share how Atos assisted in securing stability by redefining service excellence and partnership at CNA during a time of transformation.
Our legacy infrastructure contained many legacy environments. We were seeking a partner who could help us stabilize and modernize our infrastructure to meet our business goals. Through transparency and trust, Atos has significantly stabilized our environment. Atos' commitment to service excellence has never wavered. They continue to enhance and optimize their support services to meet the evolving needs of CNA and our other MSPs.
One thing that sets Atos apart is their unique approach to managed service provider orchestration. Unlike traditional models, Atos doesn't simply work alongside other MSPs. They actively coordinate and collaborate with them. They treat our other vendors and MSPs as partners, working toward the common goal of delivering the best possible solution for CNA. Atos' ability to coordinate with multiple vendors has gone a long way towards transforming service delivery at CNA.
By streamlining interactions and promoting better collaboration, Atos has helped us improve CNA's operational efficiencies and have alleviated a lot of the pressure, which can sometimes result from managing an unstable environment. Less stress, better coordination and more time to focus on strategic priorities, that's the Atos difference. Atos is more than a technology provider. They're a trusted partner, dedicated to delivering uninterrupted service and promoting collaboration that drives success. The CNA Atos commitment to transparency, excellence and partnership remains stronger than ever.
So just a big thanks to Jane and to the CNA team. And what I heard there, actually similar to what I heard in the EUROCONTROL presentation earlier was partnership, redefined innovation leading to results, right? And I think that she couldn't have said more about that being the Atos way.
But giving another example of that and how that translate commercially for just a second. So we have something we call the premier program, which focuses on 30 accounts a year roughly where we put a little bit of extra investments into making sure that we get the results from them and allow them to reach their potential, and we've done very well in seeing those clients grow in the business with us. And it's much easier to grow an existing client than it is to find a new one. So this is an example of the premier program where we provided legacy services for about 8 years, so traditional infrastructure services.
And we came in, we showed them, so redefining again how we could transform their business into being a cloud infrastructure business over time. It just so happened, they then decided that they were going to replace their core platform, the proprietary platform that have been around for 15 or 20 years and develop a new one. And so we were able to secure the testing of the application there. We were able to secure the cyber business and make it safe and also the data business, right?
So we're now in the midst of building their data instance with data centric, so that they can have the perpetual benefit of having AIOps to reinforce their platform. And just along the way, we've grown 33% a year, right? So this is a good example.
So I think we've heard about our ambition, what we have, how we're going to go do it. And I guess I close with we have some good early insights of success. So we've done better in our Q4 book-to-bill versus we did in the prior Q4, so year-on-year, which is really the only way you can benchmark Atos because there is quite a bit of seasonality in our numbers and also continue that in Q1, right?
We won 17 strategic deals since October last year, we ran -- we won one in the first 9 months last year. So you get a sense, things are very different. So our order entry was up in all of our major business lines versus the prior year in Q1. So it wasn't one deal or one opportunity, it was a pretty systemic improvement.
We did achieve the retention rate of 92%, that's so core to our plan. And now if we look forward, we've seen a 12% increase versus the same time last year. and pipeline in our existing accounts, right, which is probably the most important benchmark for us, it's the highest conversion rate. So I'm relatively optimistic, as I said before, about our future, our next 18, 36 months. There's no doubt we have a few headwinds, but we've actually got some tailwinds, too.
So thank you very much, and I'm handing over to Paul to tell you about how the people part is going to make this commercial piece happen.
Great. Thank you, Clay. Hi, my name is Paul Peterson, I'm the Chief HR Officer here at Atos, and I have been with us for 27 years, from a small company to large company through our challenges over the last couple of years, and I have to tell you, I'm super excited for what comes next. I want to tell you just a few minutes about the people of Atos because they are incredible.
They are here each and every day. They vote with their feet and they vote to stay at Atos. So the attrition rate is the same as the market. It's about 14%. And this is incredible, given the journey that we've been through. And they work and skill themselves each and every day.
Over the last 3 years, we've achieved 250,000 digital certifications in the group. We have active strong virtual cyber campus, GenAI campus, cloud campus, project management campus, campus, campus, campus. And they are fully booked producing billable employees every single day, where they come out with skills that our customers are asking for and immediately going on projects.
And we continue to work to refresh our leadership, as Philippe has spoken about, to strengthen our sales force, as Clay has spoken about. And I have to tell you something I'm super pleased about. Our key people, it's about 3,000 individuals here at Atos. They're the ones that deliver the P&L, seek new growth. They're our top talents. They hold the digital certifications, these sexy important topics that our clients want us to bring to them. They vote with their feet also, and they're staying in the group. We have a 92% retention rate amongst this most critical group within the company.
Now I asked about 50 customers a couple of weeks ago to talk to us about what they like and love about our employees. And the responses were amazing. Almost all of them came back in a matter of days. And we had responses from the Americas, across Europe, Asia, Africa, Germany, France, Belgium, Netherlands, Spain, et cetera. And I want to highlight three of them.
The first one here from Thomas Simon. He's the CEO of Paragon in Germany and in Central Europe, where they've outsourced to us all of their IT. And he talks about unwavering commitment, technical, exceptional professionalism, expertise, collaboration. This is amazing, Thomas, thank you.
And with Tarek Al Ashram, he's not only the CEO of Gulf Data Hub. He's the founder, and he was super fast coming back. And as we help him and his company expand into new markets, he talked also about technical strength, combined collaboration. And here at the bottom, I love this, combined strength of the Atos team and his team to drive into new markets to meet their expectations.
And then Paul Govan. Paul is not a CEO, and he's not a founder. He runs the payroll services for one of our big customers, NHS Scotland. And he talks about this massive transformation we ran and his team about how the whole team came together about dedication, teamwork, lessons learned.
So when I look at these comments. What you've seen in the videos already, there's a key component. It's about technical skill, and it's about collaboration. This makes us not a normal consultant partner, it makes us not a normal service provider. This means our employees are embedded with our customers so that they can run their business. I love this, and this is amazing. Thank you, Atos colleagues, the comments here I'd love to see.
Now we're ready to go. I've talked to you about our employees today. I've talked to you about how our employees love our customers and our customers love them. But we really have a clear people management strategy to be able to deliver the commitments that we're making to you today. We are reshaping our workforce. You've heard a little bit this morning or this afternoon, and you'll hear a little bit more later today. But when we're done, the right-sized workforce will primarily be in our 10 largest customers -- 10 largest countries to be able to really service our customers here.
Our employees are reskilling at pace. They're going so fast. We have more demand almost than we can keep up with. By this time next year, every employee in Atos will be AI fluent. Today, we have about 35,000 employees who have completed their AI certification. The rest of us will be finished by this time next year. So when I add an AI trained workforce with autonomous processes and a genic tooling, this is what our customers will be asking from us to be able to help them on their own AI journeys.
We continue to maximize employee engagement. We reenergized some old programs, we add new ones so that every employee of the group, from the Philippe as CEO to the newest employee who's starting somewhere in the world today that they'll understand what they need to do to help us on our commitments we're making to you today, so that they stay loyal as they've been in the past, that they follow leadership and the commitments that we take and off we go. So that's it. That's the sauce of our people, management strategy as we resize, we reskill and we reengage. And this helps us do what we're telling you to do today.
So thank you very much. Philippe, back to you.
Thank you, Paul. So now we can switch to the T, TRIM, trim the cost base. So we have too many costs unfortunately in this nice company. And from some comments I had also from this morning, the idea for us is that we don't need growth to be double-digit margin in the future. The idea we have is that we are trimming the cost to make sure we will be at a normal, I would say, profitability before growing.
So in terms of costs, there are two sets. Of course, we're going to touch. The first one is what we call the delivery, so the direct workforce. And the second one, of course, is the G&A optimization. If I go on the first one, delivery optimization, so we are looking at a billability target rate of 85%. So you will ask me what is the billability today. So it was 76% at the beginning of the year, and it's roughly at 77% end of April. Every 3 points of billability gives roughly 1 point of EBIT margin. So that's why we want to gain 3 points of profitability in the future.
The second delivery optimization in the offshoring. We have 60 plus. We want to go at 64. 2 points offshoring for information is 1 point of EBIT also. So the more showing we do, of course, the more profitability we can give. It's not an easy one, this one, because we have nearshoring and offshoring, but we'll try to push as much as possible, I would say, the offshoring part.
Then, of course, industry execution model, for example, for the global delivery center, we're going to also rationalize and simplify. We have too many of them, more than 10. We probably finish by 5 or 6. And then last but not least, what we call the black accounts. So I have a change, in fact, I would say, the terminology, black accounts, it accounts with margin, project margin below 5% because I consider also that between 0 and 5% is damaged, of course, the profitability of the group. So of course, we are now reviewing them 1 by 1.
I think that by the end of the year, there will be probably two left at a certain size. And the idea, of course, is to have no more new ones, I would say, in the growth we're going to push. So remember that I want profitable growth, not growth, profitable growth, like M&A, I want integrated M&A, I don't want M&A. If we don't integrate, we don't buy. So we're going to see after that exactly what kind of M&A we're going to do. So that's roughly, the delivery, what we call the direct cost.
Then on G&A, we're going to also reduce the cost. We are around 7% of sales. So we're going to gain 2 points in the next 4 years, so going to 7% to 5%. We're going to reduce the head counts roughly by 1,000 in the different countries. The spend non-personnel costs will be reduced roughly by 10%. So it will, in fact, be also in the margin and also in the G&A. We touched both. It's roughly EUR 100 million, of course, we are looking at this one.
And then as I say, we're going also to use AI, and I will touch this, of course, in the AI part. I would say automatize part of our back office to, I would say, of less cost in the future. So that's the TRIM, I would say, part direct costs, of course, trying to push the BWT rate.
This is something that I follow every 2 weeks now with the team. The team, in fact, the leader of team that he is here, he is meeting every Monday probably it's too much in the future. But probably every 2 weeks, I would say, after this -- when we enter, I would say, the transformation phase. But we are looking at the key ratios that, of course, are very important. The cost, of course, the growth, of course. But it's very important, of course, that this should be followed at my level and at their level to ensure we are, I would say, in the right path.
Now the last is the AI enabled. So the idea for that is to say that the company and, of course, for our clients, we need to put AI everywhere where we can. So we have three sets of projects in AI. The first one, of course, is to have a business line dedicated for the clients to give, I would say, services of AI.
The second one is to push AI in all business lines. And it should be in digital workplace. It should be in mainframe, in cyber, in cloud, et cetera. And the third one is to push AI in the back office, in our own back office in legal, in finance, in HR, in our own IT. We definitely think that there are, of course, applications. And the things that we are doing, of course, internally, which after that show to the clients, what impact we can have, I would say, on their own, I would say, G&A.
So just to say that we're going to push everywhere in the company, we should be -- everybody in this company should be an AI driven. I would say, in the future, I definitely think that AI will take -- will accelerate in fact, with the agentic world. It will come probably a little bit too soon person, but I definitely think that there will be a lot of things happening, I would say, in the future in this one. And that's why we're going to invest, I would say in AI, both internally and externally for clients.
For this, I will give the floor to Narendra, who is the new EVP of Data and AI for Atos.
So I'm Narendra Naidu, I'm going to head the new data and AI business line. I have been with the group for almost 18-plus years, playing various leadership roles.
So AI is going to be an absolute game changer for us in two broad areas, as Philippe mentioned. First, in the services that we offer to our customers; and second, how we use AI to transform our own delivery. We are very excited about the tremendous opportunity that AI brings to us. And hence, we are creating a dedicated business line focusing only on offering data and AI services to our customers.
Right now, we are consolidating all the data and AI competencies across the group into this new business line. We also believe that AI is going to play a role in all of our existing services. So we are going to enhance and augment all our existing services, that would be cyber services, digital services, cloud and infrastructure services with AI so that we can deliver greater value for our customers.
AI is also going to fundamentally transform the way we do delivery across everything, development, testing, IT operations, et cetera. And we are going to use the power of generative AI and Agentic AI, so supercharge the productivity of our developers and accelerate digital transformation for our customers.
As Philippe mentioned, there's also an opportunity to use AI for our own internal operations across HR, workforce management, finance and optimize the costs and also improve the employee experience. A quick snapshot of the services that we are going to offer in the new business line, so we are going to offer services across the complete data and AI value chain.
Starting right from strategy and advisory services, where we help our customers align their AI strategy with their business objectives. Business objectives could be around reducing costs, creating new -- generating new streams of revenue or employing -- enhancing the customer experience, et cetera. So that's the first thing we're going to focus on.
And in the last few years, we have realized that a lot of customers struggle in their AI strategy because they do not have a solid data condition. In fact, we are absolutely sure that unless customers invest in building a solid data foundation, we cannot succeed in the AI strategy. And that's what we are going to focus in our data services.
We have deep expertise in building highly scalable and industrialized data platforms for our customers. And once the data platform is ready, on top of it, we are going to help them deliver AI services. In the past few years, a lot of customers have stuck in a continuous loop of -- proof of concepts for AI, okay? And they're struggling to industrialize and scale their AI solutions.
So we have an offer something which we call AI Factory. Just like a physical factory process, physical goods, our AI Factory will enable customers to roll out AI solutions faster to market through automation of data pipelines, automation of machine learning training as well as automation of machine learning deployments, et cetera.
And finally, we're also going to invest in building three packaged industry-specific solutions across financial services, health care, manufacturing, et cetera. We are very bullish on the potential of Agentic AI and investing in the R&D efforts to create something called us autonomous AI developers or autonomous AI testers and autonomous AI support engineers, which will boost the productivity of our services that we deliver to customers.
As we speak today, we have around 2,000 people in this new business line, but our ambition is to grow 5x to around 10,000 people in the next 3 years. And as Paul mentioned, today, we have around 50% of our workforce who are certified on our foundational course on AI, and we are confident that at the end of next year, 100% of our resources will be certified on our internal AI course.
I would like to share four examples of -- real life examples of how we are already leveraging the power of AI to deliver value to our customers. Starting with Satair, which is a manufacturer of aircraft parts. They wanted a highly scalable industrialized platform to roll out their 50-plus AI use cases that we are working on.
So as I mentioned, we used our AI Factory approach and automated their pipelines as well as their machine learning pipelines and deployed their solutions on them, which helped them to achieve almost 30% faster to market. We are deploying solutions around customer virtual assistance, automation of quotations, et cetera.
For Talgo, which is a train manufacturer, we build them a streaming AI platform that can ingest huge volume of data, almost like 30,000 events per second per train. And on top of these events, we have AI models, which can do predictive maintenance and thus improve the reliability of trains.
For Estée Lauder, which is a cosmetics giant, we actually build a GenAI engine for them, which can ingest data across all of their customer interactions on e-mails, social media channels, chat responses and do a sentiment analysis on top of them. And this is running across 40-plus countries and 20-plus brands. And it enables them to understand customer sentiment and take proactive measures to improve customer experience.
The fourth case study is for Rabobank, which is a bank in Europe. And for them, we have implemented our Responsible AI framework, which helps them adhere to the European Union AI Act. And it's not just about regulation. Our Responsible AI framework also helps the customer address challenges around AI security, bias in AI, hallucinations, et cetera.
So to summarize, if you see, we already have a rich variety of experience across multiple facets of AI, talking right from Responsible AI, to generative AI, to streaming AI and factory AI. Now we need to scale it out across all our customers. As we mentioned, we are also using AI to transform our own delivery for a large insurance firm in the Americas. We actually used the power of AI to automate almost 44,000 transactions using generative AI and Agentic AI. Similarly, for a large consulting player, we could eliminate 42,000 tickets through -- by driving greater levels of self-service through our GenAI conversational engine.
Now in the interest of time, I'd like to show you a short video which demonstrates the tools and accelerators that we have built around generative AI and Agentic AI. Agentic AI is enabling us to drive something which we call as automation of automation. What do I mean by that? Traditionally, we were focused on moving away from manual efforts to automation. And now we are actually able to use Agentic AI to automate the creation of automation scripts. And that's what we mean by automation of automation.
Let me quickly play you the video.
[Presentation]
So to summarize, generative AI and Agentic AI are big game changers for us. It's going to boost the productivity of our resources as well as help our customers accelerate their digital transformation through autonomous operations. Thank you.
Thank you. So that's the end of the new Atos, Simplify, Orchestrate, Trim Atos -- excuse me, AI everywhere. And as you can imagine, that's the letter of Atos on the reverse.
So that finishes, I would say, how we're going to play this. And then, of course, you know that when I implement a strategy, we need a transformation plan that is very important because we need to ensure, of course, that we deliver, I would say, what we have decided to set.
I'd like to give names in my plan. So this one is called genesis. That's the plan we're going to have for the next 2 to 3 years. It will take some time. And there are 22 different streams as you can see, 7, let's say, big categories on growth, HR, country reviews, portfolio review, which is the business line, the gross margin, the cost review and the cash.
And then on the growth, with Clay, KAM organization and key account focus. So that's already, I would say, going on. Industries also, which one we want to select versus the other one, where we want to more, let's say, invest. Bid excellence, so that's -- we'd say we have an internal process to make sure also that when we bid, we follow, I would say, a normal path, and we avoid, I would say, contracts that are bleeding, I would say in the future and M&A in the future.
In HR, of course, its culture. And the culture of cash is important. Cash is king I said to the team. I see their cash every day at 6:00 p.m. I have exactly, I would say, the level of cash we have in the company. And then, of course, all the incentives we're going to give to the different teams in the growth team, in the delivery teams as a country [indiscernible] et. cetera.
Country review, as I say, reinforce or exit. So we're going to exist faster some of them. In the portfolio review, you have the business line offer. So that's why now we have 6 with Atos, 4, I would say, dividend. Contract review is the low profitability. So we looked at all the black contracts and the right contracts, it's a margin between 5% and 15%. So we're looking also at them to make sure I would say we have the right level of profitability.
And then what we call parties turnaround, we have some business lines where definitely we want to go deeper, I would say, in terms of turnaround like digital workplace. We do also in HPC. Gross margin, now it's the billability rate. So that's the TRIM. The presales cost also because this is part of the billability. We want to make sure we say we have the right cost there.
Project margin announcements, that's the move to offshore, of course, and the pricing. But I definitely think that the MTO, the move to offshore, will be also probably at par with the MTA, the move to agentic because definitely, we think that there will be a lot of things we're going to be more efficient in terms of delivery, I would say, in the future.
Delivery excellence, it's all the programs to make sure I would say we deliver on standard. It is done by Frédéric. This will be done in the course of this year or next year. And then as I said, R&D, making sure, I'd say we have the right investment in the different periods.
Cost review, the G&A, excluding real estate, the real estate review, of course, like zone work far too expensive and far too big. And then the IT spend, so with Frédéric Aubrière the CIO of the group, I look at, I would say, the systems and operations for the bid, for example, we have one system. We can probably replace it next year, we see and then for the delivery, of course.
And then after that on cash with Jacques-François, the DSO and the DPO. Jacques-François will tell you, the idea is that we want to have recurring actions on the cash. If we decrease the DSO, it's because we have processes that are put in place to have a sustainable DSO. I don't want to have a peak like I would say in the past. And DPO is the same thing. So we force, our staff to pay the suppliers every month, especially at the end of the quarter because we don't play with that.
But we can renegotiate, of course, the terms of the contract with our suppliers to make sure we are, I would say, higher DPO in the future. Again, a sustainable, I would say, DPO. Then securitization, it's a subject we can touch in the course of '26. CapEx review, of course, for the different years and then tax management to make sure we pay, I would say, the right level of tax in the different countries. And we have, of course, some tax losses in the balance sheet.
This is the Genesis program and who is here also is the VP in charge of Genesis, and this is all the streams that we are looking on a weekly basis, they're different, of course. In some weeks, we move, I would say, in different part of course of this table. But it's very important to understand that the transformation, of course, should be followed at CEO level at, of course, leader's team level to make sure, I would say we deliver the plan and the strategic plan.
Now we can switch probably to the part also you are looking at, which is the financial part. So how we translate, I would say, this strategy all these initiatives in terms of cyber, growth, HR, AI, into real numbers and what are the goals, of course, we're going to set ourselves for the next 4 years.
So I give the floor to Jacques-François.
Thank you very much, Philippe. Hi, everybody. It's great to see you today in person here in Bezons.
So indeed, I'm going to share two things mainly. One is the guidance for fiscal year '25. Two is, what all of this transformation and strategic plan, what does it mean in terms of financial trajectory for us until 2028.
Before I get into this '25 guidance, maybe one word about last year. So we had our high and lows. That was a tough year, I must recognize. But thanks to the efforts of the teams, thanks to the support of our shareholders and debt holders, thanks to the trust from our clients, we now have a secured and stable capital structure. That's very important. We start the year with this stable and secure capital structure. These events last year, of course, had some impacts on the decisions we have to take and indeed on the performance for '25, particularly on revenue and margin.
So let's start with the revenue for fiscal year '25. You recognize to the left, the EUR 9.6 billion for the revenue of last year. And what we are guiding you to today is about a decline of EUR 1.1 billion, bringing us to EUR 8.5 billion at the end of the year. So this comes from three main elements.
The first one is the perimeter change, so that the disposal of Worldgrid, which has been completed last year -- at the end of last year. Then we have the voluntary decision from Atos to exit some nonstrategic contracts or nonprofitable contracts. That's the black accounts Philippe was referring to, but we also have some activities where we have decided to go. So that's roughly EUR 300 million.
And then the remainder, EUR 600 million comes from the loss of business, be it the contract ramp downs or terminations from last year due to our default situation and also from the soft market, which we have talked about and which has been also reported by some competitors. So that's the EUR 8.5 billion for this year.
In terms of phasing towards the year, just to give a bit more of color. So you have seen our Q1 top line growth, which was a strong decline. You should not expect anything better in Q2. It will be slightly better in Q3. And due to the mechanical impact of the comparables from last year, where the situation started to really have an impact on the top line in Q4.
We expect to have a run rate -- an exit rate for Q4 in terms of top line, which will be in positive territory, paving the way for the future evolutions in '26 and beyond. Maybe one word as well, which is that in terms not only of revenue, but also I will talk about the seasonality later. This is true that our seasonality is expected to be heavily loaded in H2 compared to H1.
Moving now to the guidance for the margin. So again, starting from the left, very standard. We start with a 2% reported organic growth -- sorry, operating margin in '25 -- '24. And thanks, well, due to all these reasons, we have -- which have been explained already in the various presentations, we have a relatively minor impact of this Worldgrid disposal. That's the number one.
Then you have the positive impact on the operating margin of the voluntary exits we have decided on the most strategic contracts and on the loss-making contract. So that's approximately 1 percentage point. Then we have this delivery optimization. That's not the end of the road, but that's the beginning of the road because we have some actions from Genesis and all the programs, which are starting to pay off and to have some impacts already in our accounts in '25.
And similarly for G&A, there's also some impact, which will be perceived and reported already this year. One word maybe to finish on this guidance is about the cash. So in terms of cash, we confirm our planned consumption for the year. So for '25, it doesn't change versus what we said before, which means consumption of approximately EUR 350 million in '25, which, as you will recall, and you will guess as well is mainly related to our restructuring program.
Right. Now that I have talked about the guidance for '25 in terms of revenue and operating margin, there is this additional message I would like to convey for you to be clear on what is our pro forma baseline. These changes might happen partially this year or might not happen partially this year, but that's the baseline to consider and to have in mind in terms of what's the start of our growth story, okay? Because out of the 8.5, we have this disposal, which is currently being under negotiation of the advanced computing division, which represents EUR 800 million. And we have this exit of countries mentioned by Philippe for EUR 300. So really the baseline, you need to have in mind for the future and for the trajectory, I will explain in a minute, is really EUR 7.5 billion.
Whilst this margin -- whilst this revenue goes from 8.5% to 7.5%, we expect the margin to still be the same at 4%, right? The pluses and the minuses are offsetting each other. So conclusion, effective starting point for us, this is EUR 7.5 billion revenue with 4% operating margin.
Now if we look at the future, let's go beyond financial trajectory, what's the ambition, what's the outlook, two main parts to this chart. The first, on the left-hand side, that's the organic growth. So we expect to grow the topline by 5% to 7% CAGR through the different drivers mentioned by Clay already.
So reaching the full potential on our customer base, driving additional growth with a next-generation services and the industry offerings and also hunting for new clients. So that's an additional EUR 1 billion to EUR 1.5 billion revenue, leading us to EUR 8.5 billion to 9 billion organic growth -- organic revenue.
On top of that, we wanted to do some targeted disciplined integrated M&A to acquire another EUR 500 million to EUR 1 billion revenue on top and beyond, which will be funded from our own money just to make sure nobody -- is clear for everybody, bringing us to a top line of EUR 9 million to EUR 10 million in '28.
In terms of operating margins, so I think the different elements and drivers have already been very clearly articulated. But let's see what it means in terms of numbers, and let's put all of them together. So obviously, the billability improvements mentioned by Philippe is very clear, right? When we have people sitting on the bench, well, we don't make money with them. So the more they are deployed at customers of course, then we can do not only revenue, but most importantly, profitability and cash from that.
Then you have the incremental delivery optimization right, which comes from this move to offshore, the pricing, the automation and other drivers. We have the reduction of G&A, we mentioned before, profitable growth, and we don't forget to keep some money to invest for innovation and R&D. So with a renewed and more efficient operating model, with strong discipline in sales and delivery, incremental growth will come with a structurally better profitability.
Conclusion, we expect our operating margin to be in the 10% in '28, which is closer to the industry standard.
Cash. You know Philippe, cash is king, and we think cash, we dream cash all the time. So key messages here. The first one, bottom right, is that for '26, our ambition, our plan, which I'm very confident we will deliver is to be cash positive generation of cash from '26. So obviously, the first driver is the improvement of the operating margin, which I've just described before. But on top of that, I believe there is a lot to do on the working capital.
And again, Philippe has explained that, but I want to be extremely clear. We have been very transparent about that already last year. We are not engaging in nonrecurring, non-sustainable, one-off working capital optimization actions. I stress that very much. But there is a lot to do in recurring, sustainable working capital actions such as DSO improvement, DPO improvement, et cetera.
Some of you, I'm sure, maybe all of you have read our ULD for '24. You have noted maybe the DPO amounted to 19 days, 1-9. Well, that was the impact of what happened last year. And that just gives an idea of the potential to go towards something more in the industry standards even before we're talking about best-in-class.
CapEx remains under control around 2%. The restructuring program is approximately EUR 700 million over 3 years. Actually, we plan to do that to finalize that by the end -- sorry, by the middle of 2027. The cash, nothing very much to report on cash other than it's growing in line with the business, and we have some cash -- sorry, tax losses carry forward, plenty to utilize.
The cost of debt if I look at the cash side of that is roughly EUR 170 million per annum, but that's only one portion, as you know. On top of that, we have the noncash part, which is the payment in kind, which is another EUR 100 million, which makes the cost of our debt very heavy, and which makes, if need be, that be really on the top of the priorities in terms of refinancing and replacing this debt as soon as we can with a cheaper debt. We are conscious that there is a lot to do and to deliver and to demonstrate before we can really launch this refinancing, but it remains at most importance.
Capital allocation, in line with what I just said about the refinancing. So #1 priority is this net debt reduction, okay? So we target a leverage ratio below 1.5x, the net debt on OMDAL that's what we have in our documentation of credit from the restructuring last year. So this below 1.5x in fiscal year '28. We target a BB credit rating profile in '27 on the trajectory to become investment grade.
Number two, is M&A. So that is part of -- that's the inorganic part of our plan. If we want to acquire some revenue and be consistent and coherent with the rest of the plan, this is true that nothing in '25, but from '26, we will look at opportunities on the market, obviously, in line with our priorities shared with you today. Dividends and share buyback programs are not expected at this stage before 2028.
So my last page is a reminder of our cash, of our debt, of our maturities, so you see we have EUR 2 billion of liquidity at the end of March. We have a gross debt of EUR 2.5 billion. We have no maturity before the end of 2029. So in a way, this is really what I would like you to remember from this financial slide, financial trajectory is, a, with the financial restructuring from last year, we have gained cash, time and flexibility to implement the plan. Today, the plan has been presented to you. You see that's a growth plan, that's a focused plan. We have a stable balance sheet, and we have an ambition to grow the top line up to EUR 9 billion to EUR 10 billion revenue with a 10% operating margin.
So that's the end of my section but that's the financial section is very important at Atos as well, the nonfinancial performance, the nonfinancial elements. So I will hand over to Alexandra for the next session. Thank you.
Thank you. Thank you. This is working, thank you, great. So welcome. Good afternoon. My name is Alexandra Knupe, and I'm in charge for CSR Group Sustainability. I do this since 2020. So you might think why should you listen to sustainability in this context of a Capital Market Day. So there are actually two good reasons, and I would like to share them with you.
So the first reason is obviously about reporting so you need to trust you, our clients, our partner need to trust our nonfinancial reporting. So they need to know, we know our ESG related risks and that we know how to handle them and that we know how to comply to new regulations. So -- and we do, we just published our first CSRD report. So we did our first CSRD conform materiality assessment. So we identified our ESG-related risks and opportunities. And we do have a clue on, we do know, we do have a plan how to handle them.
So the second reason is even more important, and this is CSR is business. So CSR sustainability became a business imperative. CSR in these dimensions of ESG, environment, social and governance, accounts up to 20% of our score in average RFPs. So CSR is actually a competitive advantage.
If the reporting is done in an accurate way because this is a foundation for this 20% assets in our RFPs. So -- and we strongly believe in Atos, the digital support sustainable targets. So we specifically pursue digital sustainability targets. So we want to continue our digital decarbonization. We try to become more attractive for women in digital career.
And we are very ambitious to provide accessible digital solutions using assistive technologies. So to gain this trust, obtain this trust. We need to walk the talk. So we need to walk the talk. So we need to ideally lead by example. So the most frequent, most common question we get from our supplier, excuse me, from our clients, from our partners is dear Atos, how can you support us in our environmental targets, specifically in our decarbonization target. And this combination of digital technologies and our proven expertise in CSR, especially in the field of decarbonization, makes us a quite strong attractive partner in this discussion. So we know how to address decarbonization targets. So Atos is quite proud because we have a very ambitious net zero target, fully SBTi aligned following all standards. So -- and therefore, we know how to deal with Scope 3.
And this is important because our clients will know that we speak their language. We know what needs to be done because we're expecting this from our supply chain. So they know that we're assessing our supply chain. They know exactly that we know what they're expecting from us. So this is the kind of circle and asset circle, which is a benefit for our business.
So that means if you're talking to clients, they can expect a specific minimum of standard transparency, application of method and scientific methodologies and increases their trust. So that means we will continue our net zero ambition. I'm proud to say that Atos has a very ambitious net zero target that actually started in 2019.
So in 2019, we made the promise to reduce our carbon footprint by 50% until end of '25, full Scope 1, 2 and 3. And I can say we are on track. So due to the latest reporting, there's 8% remaining compared to '24. So we will work very hard to achieve our '25 reduction target, which has been quite impressive with 50% reduction, full scope. So -- and based on this performance and the knowledge we gain, and this experience, Atos will set itself the next target, the next decarbonization target, which is another 36% until '35, which is quite compelling because it's based on the 50% reduction that will be hopefully achieved by end of '25. Again, of course, full Scope 1, 2 and 3.
So yes, I would say, indeed, CSR makes a difference. CSR is a business contributor. So -- and we have all these discussions with our clients. It's quite common that I'm invited to join client discussions and to share some experience. For example, what we do to assess our supply chain, what we do get the data we need, how do we deal with data. We think about potentially the usage of AI in the future to even improve our sustainability reporting. I would like to share one example of how sustainability contributes to our client relationship.
So Jim, if you could please play the video.
Hello, I'm Chris Howes, Chief Digital and Information Officer at Defra, that's the Department for Environment, Food and Rural Affairs, the U.K. Government department responsible for protecting our environment and supporting the country's food and farming sectors. At Defra, the challenges, we're facing are complex and urgent, climate change, biodiversity loss, sustainable agriculture, flood prevention and clean water ways, responding effectively requires more than policy, it demands modern data-driven technology and trusted partnerships, which is where Atos comes in.
Our relationship with Atos has evolved significantly over the years. What began as a single application development contract has grown into a comprehensive and strategic digital partnership from on-premise and cloud hosting to digital applications, cybersecurity and ServiceNow consultancy.
They also play a key role in one of our major reform programs. This partnership goes beyond delivery. It's grounded in our shared values together, we've worked on diversity and inclusion, skills development and social value initiatives, areas that matter deeply to both our organizations.
Sustainability is central to Defra's mission, and Atos brings real commitment to that goal, not just in what they say, but in what they do. Their teams integrate environmental action into core services and collaborate with specialist partners to drive measurable impact as well as my CDIO role in my department. I'm senior responsible owner for sustainable IT across government, through the U.K. government Digital Sustainability Alliance.
From the outset, Atos has played a leadership role, not just working with the government, but across the whole technology industry. Atos have been proactive in exploring how emerging technologies can deliver real value for Defra. As an example, they've undertaken a series of AI explorations including in areas such as modernizing legacy applications, improving access to information for our staff and the citizens we serve.
These are exactly the kinds of innovations that help us become a more efficient, agile and responsive organization. A great example is our groundbreaking new end user services contract. It's transforming how we support 34,000 users using analytics and automation to become a proactive inclusive and user-centered service. For example, we'll refresh devices based on their performance rather than on fixed schedules. The Atos solution will make it the most environmentally friendly and sustainable U.K. government digital workplace solution available today with circular economy principles embedded throughout.
As we look ahead, partnerships like this are vital. With Atos, we're building the digital foundations to deliver resilient, sustainable services that protect the environment and support communities across the U.K. with our shared values around responsible modern technology, innovation and sustainability, Atos and Defra will continue to learn from each other and build our partnership.
Thank you. So I would like to spend a few last words on our ratings. So first of all, I'm quite proud that we are still and again among the group of the best IT service providers worldwide in this context of CSR. This is outstanding important because, of course, it's further proof of our ambition in the next nonfinancial reporting and evidence for our ambition. But these rating results, they're not given for the highest or best CSR target.
So these rating results actually result of a very solid data management and data provision. Companies get good rating results because they are as transparent as possible. They follow the latest reporting obligations. They use standards, they use scientific methodologies. They publish all their proof and evidence and they do this ESV [indiscernible]. So it's proof that we have the same level of accuracy, not just in the E, but in social and governance as well. Otherwise, Atos wouldn't get this result.
And we received these results now for 5 years in a row, which is quite sustainable. So yes, I'm convinced that CSR provides a business contribution. And I'm happy that Philippe and the management team support this. Thank you. Back to Philippe.
So we are, at the end, almost I will take some Q&A after that. So just for -- to wrap up, I would say we have -- our path to success. First, I think it's very important to understand that this is not a one-man show. It has been a team effort, probably between 50 and 100 people were involved in the strategy. So there were a lot of debates.
The leaders team has met many times, in fact, between December and now. And I want to just reensure that it is, I would say, a team vision and a team, I would say, also a commitment to the numbers. We have, I think, a clear vision. We know exactly where we want to play. It's very important. The transformation plan, of course, is in place with Genesis, exactly the phase we're going to have in the coming months. It will still probably in the course of '27. And as I say, we have achievable financial targets.
Now just to recap, I would say, the milestone we have in our plan 2025, so we're going to a roughly EUR 8.5 billion, roughly around 4% of EBIT or operating margin. And as Jacques-François said, the cash will be roughly minus [ EUR 350]. Remember that my goal is to accelerate the restructuring. So the cash, I would say, it's not a big problem for this year because the sooner the restructuring, the better the profitability in the coming years. So if we can accelerate even more, we estimate we will be at 60% -- between 60% and 70% of the restructuring by '25 and the remaining, of course, by '26, a little bit at the end, I would say, beginning of '27. But I would say the timing for us is not an issue. What is important is to make the execution, which is very important.
Next year, we will be positive in terms of growth and also positive in terms of cash, of course, it's very important. When I say cash flow positive before debt repayment and M&A, of course. M&A, no M&A in '25, then it's forbidden. Probably no M&A in H1 '26 also because I want the team to focus and stay, I would say, very focused on the Genesis plan. And then we can restart, I would say, the M&A in H2.
And then 2028, that's the goal that we say we have roughly the EUR 10 billion at 10%. So EUR 1 billion of OEM is the internal target for the team. That's exactly what we want to head for. We see if we can, I would say, touch, I would say, that this top, I would say, ambition in terms of sales and of course, in terms of, I would say, margin. The idea, of course, is to deleverage, of course, the balance sheet, and we will do that, of course, by providing cash. And I know that I will have some questions. But M&A, there will no capital increase for the next 4 years. I don't need equity.
We don't need also new debt. So we need to be on our own with our own cash, I would say, to fund, of course, the M&A. And if we don't have enough cash, we will do less M&A that will be very, I would say, wise on this one.
I just want to show you a last slide that we have done with Bain. This is the -- roughly, you see on this chart on the horizontal, this is roughly the revenue growth, and this is the EBIT margin. And in fact, you can see that on the right hand side the regional players, you have the Indian players and the what we call the Twitch mostly, I would say, fast growing and I would say, a faster and higher digit margin. And we want to play in this bandwidth, in fact, in the characters [indiscernible] between 20% and 30% at least 10% growth, 10% EBIT or less growth and more EBIT, whatever.
We definitely think that it is in this area that Atos should be compared to other competitors. So as you can see, of course, we start in '24 with decreasing growth and 2% margin, then we will accelerate, unfortunately, the inorganic growth because we're going to decrease by roughly 10%. But we double, I would say, the margin. And then the goal that we have in the plan is not to be, I would say, in this bandwidth by 2028. It is quite, I would say, challenging for us, for sure. But definitely, this is the area where we want to play. So I think that's it for me. I will take the iPad just because there are questions online, and we'll take also the questions, of course, in I would say, the room. So I can take some questions directly or I can take the questions in -- we're going to give you a micro because, in fact, since we are registered, so everybody can hear you.
Capital Markets Day. One question on your revenue growth. You show market growing 8% and then you're growing 5% to 7%. Just wondering like, where do you get the growth from? Is it like taking -- because right now, everyone has their customers. They're taking some customers from other players or like your existing customers offering them more services, so you have growth. I'm just wondering what are the drivers because your competitors are quite highly rated like Capgemini and Accenture, they are good companies. I'm just wondering if you taking market share from them, how do you plan to do that if that's the case?
I think the answer is both. But I remember the number that Claire has put in one of his slides. On average, in our key customers, we provide 1.6 business lines out of the 6. So definitely, I definitely think that with the market share of Atos in these top clients is too little. So if we look at the growth for the next 3 years, between '26 and '28, when we look at the business plan from the different BLs and geos, most of the growth is coming from existing clients.
We have new logos. We call that new logos. Of course, it's important because there is, of course, a rotation of clients every year. But I would say I prefer the teams right now to focus on the existing client base because it's very solid. And definitely, we see a lot of potential. Then I would say to hunt too much, I would say, on new, I would say, companies where we don't, we are not a customer for the moment. But it will be a balance between the 2 because we're going to lose clients for sure.
And that's the normal way, I would say, of life for us. So we need to have new clients. But I would say most of the growth, more than 50% of the growth is coming from existing base. And Clay, you can correct me if I'm wrong. Yes, you can speak.
Yes. I can hear myself. Okay. Actually, it's even higher in terms of our existing base. So again, there's 3 primary drivers. So there's selling the additional services into our existing base that tends to be the high post services, the more volumetric services where we do about $3 billion today.
So we're talking about taking that up again, 10% per year. Then there's the new revenue streams, but even the new revenue streams primarily comes from our existing customers. So on average, we're talking about winning out of those 5 to 8, you're probably talking about 2 to 3 new logos from 2026.
So if you look at it, the 80%, 90% of the growth comes from existing customers but not necessarily the same services with the existing customers if that's clear.
Okay. I can take one question online, and then I can switch from online to in the room. How do you plan to fund investments debt renegotiation on new debt, free cash flow capital increase.
So as I said, no capital increase. No new debt also. We can renegotiate the debt. I know we will be looking at this, it could be an opportunity, but it's too soon for the moment. So we need, I would say, to deliver cash flow. It's impossible, I would say, to go to raise, I would say, or replace, I would say, the existing debt if we are not cash flow positive, it's impossible. So that's why it's a subject in the '26 or '27, we will see, of course, when the pace, I would say, of the cash flow. So I would say we are self-autonomous. We don't need external, I would say, cash to do the plan. And as I say, if the plan is a little bit less than anticipated, so we produce, I would say, less cash then we will do less M&A, and that's it, I would say, be very cautious in terms, I would say, of cash to make sure that we don't burn, I would say, any cash. Questions in the -- go ahead.
Nicolas David from BHF. I have a few questions. The first one is regarding the restructuring. You mentioned that 60% to 70% will be done by the end of the year. But are we talking about restructuring costs, which have already been provisioned or basically, what is the pocket over securing has been -- what has been provisioned what not?
I don't. In fact, I'm looking on our cash or the provisions, I don't know, which Francois probably knows, but the cash is more important. With the EUR 700 million of cash for the restructuring. 60% to 70%, it means we're going to burn between EUR 400 million and EUR 500 million this year.
Provisions, there are some provisions in the balance sheet, you're right. The question, what is the provision. I don't know I'm just looking at the cash flow statement. So I would say the provisions, of course, are not playing on this one. Yes.
And my second question is in your free cash flow assumption for the period '25 to '28, what is the weight of working cap improvement into this free cash flow assumption.
So in fact, we didn't provide any number. That's a good question. I would say as Jacques-François say, and as I said, we want to reduce the DSO and increase the DPO that's normal. And on a sustainable basis, it's very important because they would say that the weakness of this company was really, I would say, to play with this number, and I don't want to do that. No securitization and this year, there is no securitization at tenor.
There is no coming also for H1. So there is no plan for the moment to do that. And in the cash flow statement, of course, I don't take into account if there is a securitization one day that it's cash available for me. It's just a different kind of debt, I would say, but it's not, I would say, per se, cash flow.
In terms of DSO, we want to reduce, we increase -- reduce the DSO probably by 10 days. That's an internal goal that we have and increase the DSO by probably a couple of days. It could have an impact of roughly EUR 300 million of cash in 4 years. So we will try probably to accelerate this between '25, '26, let's say '27, but it is an impact. But in fact, when you look at the leverage at 1.5x in '28, we didn't take it to incur a lot of, I would say, that part of cash. So it could be good news, I would say, in terms of cash flow.
But I would say we need to work on the DSO. So we need to have also people, I would say, chasing about, I would say, our invoices to make sure we have paid obviously on the right time. Making share also on the new contracts that we have also the right terms in terms of payment, maximum 60 days. I prefer, of course, 30 days. In some contracts, sometimes it's even less than that. And for the DPO, we are looking at all the base of suppliers, and we are negotiating with DPO to normalize, I would say, the payments of suppliers.
Okay. And the last 1 from my side. Regarding margins in '25, two elements. Do you expect EBITDA or MDA margin to increase by two points, like operating margin or a bit more because I think you had some extra CapEx last year that you will need to amortize. So that's a pretty typical one. And also, I'm a bit surprised that your proforma margin, excluding advanced computing and the country you are closing is not higher than the reported one because advanced computing there seems to be so profitable right now. And those countries, I suppose if you are closing there, they are supposed to be less able.
Advanced computing is around 4%, 5% EBIT, so it doesn't change. In fact, it is profitable. It's not a high margin, but it's profitable. And since we are not high margin for the government, I think it has not a big impact. The rest is EUR 300 million out of EUR 9 billion. So it's roughly 3%, 4%, it doesn't change anything. The margin impact of the countries that we divest is lower also, but it's very tiny versus, I would say, the rest that's why.
Now in terms of MDR, yes, we had the GPT program last year. We had more CapEx than we have, we say, a normal course. Do we have two points in MDR versus OEM, I don't know. I don't know. I don't know the answer. Probably less because, of course, we put the leases, the CapEx back, so in fact, I would say the delta on I think the data if we do, let's say, the 4% on 8.5 is roughly EUR 350 million. So we do roughly EUR 150 million more in terms of OEM, which was probably EUR 150 million more number, and I definitely think that the percentage will be less than.
Perfect. I take another online and Clay, one for you again . Your renewal rate of 8 -- of 92% only reflects the contracts you have actually bid on . What is the proportion of contracts up for renewal? Have you either chosen not to bid on or you were excluded from by the client.
Sure. Let me take the second part of that quickly. So the math is correct. Let's start with that. There's very few -- I mean, I've been scratching my head to think of, and I'm looking at my colleagues where we've actually been excluded, right? Even in the past, I'm sure there's somewhere, there's a couple based on what happened last year. But normally, you keep the incumbent in, right, if you're running through procurement. So that figure is very, very small. There is a number that we've chosen not to bid that's reflected in that EUR 300 million that we walked away from. But it doesn't fundamentally change that ratio. That 92% ratio is a pretty good ratio. The stuff we walked away from, there was about EUR 700 million last year. right, and the year before between the 2 years. So I don't think it really changes the answer. The 92% good question, but is pretty clean.
Okay. A question regarding myself. How many shares do you have? And do you plan to invest more? It's a good question first because I want to reiterate the fact that I have subscribed at 9,240,000 shares right now in December '18. And Atos has not given me any signing bonus or welcome bonus or whatever. I see that it's normal that he has bought shares because it has been paid by Atos. No. It has been paid only from my cash and it's my own investment.
Do I want to invest more? Probably, the problem is that I am very conflicted in many decisions. So the open windows are not very open. In fact, that's the difficulty. But I will try to find an open window. Sheila, our general secretary is watching me very carefully what I'm doing and she's right.
Yes, I want to probably increase my shareholding in the future. Yes. And I will try, I would say, to do it probably in the course of this year. Any other questions in the room because I have lot of questions online. No. Yes. Okay. Go on.
Just a quick question. Given the macro environment, do you expect any growth in the defense sector? Or is there any pressure from the French government for the French companies to support the defense?
Yes. Of course, that's a good question. Yes, we're going to have a growth in the defense sector, its true in France, but it's true in many countries, Sweden, Germany, Denmark, U.K., Netherlands, Belgium, Spain. So yes, we definitely think that as you see, we are 6%, 7% of our sales in defense. I definitely think we're probably much higher in the future. And of course, in our own with service area, we're not competing, I would say, for some aspects of defense for sure. But in our area, yes, I definitely think we do more.
There's a question for you again, Clay. Will Atos continue to be the major channel to market for Evidian products or will Evidian be Increasing sold separately?
Okay. So the answer is both. So even today, a lot of the customers are direct relationship customers and at some level, not exclusive, but heavily evident-based customers. And then there's other customers where there's both. We have set up an incentive scheme for the Atos side to promote and sell in the Evidian product scheme, so that they're very clear that this is in their best interest. But also from a go-to-market, it makes sense. So if you think about the power of high-performance computing, in particular and Mission Control Systems is another one, in conjunction with data, AI and the power that, that brings into applications into customers and financial services, defense, the combination is a really strong one. So I think that will just continue to flourish despite the fact that there's a bit of separation.
Stay alive because they have more questions for you. How do you for example, in order to avoid getting into new low-margin accounts, how are you handling this situation? Is there an internal hurdle rate for new accounts to overcome? In stating that, how conservative are you with future cost expectations for new deals?
Okay. Let's start. We don't have a separate hurdle rate for new customers versus existing customers. We have a target hurdle rate for every customer by offering type because that adjusts the risk in what we expect to come in from a cash return.
And that's all managed globally. The metrics are out there with a gated set of sponsors and sign-offs that have to happen. And any deviations on the terms and conditions get escalated up to make ultimately to make a decision. So there isn't a lower. We're not buying anything. We're really clear that we're not out to buy margin. Sorry, i am not allowed to buy share. We're absolutely out to make sure we secure the right business. And that's been evident and you can see the business. If we think about it, I think there's only one what I would call Black Contract of things we've even signed in the last 2 years of any size. So it's already starting to flow through the system, the new regime. I can't remember the first part of the question.
Oh I have erase it.
Okay. Okay. Sorry. So if anybody wants to fire back, we'll make sure we tackle it.
Okay. Very clever question.
So I've got 4 questions. The first one is about the positioning of Atos versus the market because it seems that you put a little bit or you minimize the fact that the Atos portfolio today is not correct completely reflecting how the market is structured in a sense that you said rightly that the potential addressable market is EUR 1.3 trillion. The total addressable market?
EUR 400 billion.
So here, you acknowledge the fact that you are not trying to chase all the markets. But at the same time, if I look to the potential growth rate of the market where you are playing in, most of them are growing less than market average. If I take digital workplaces, managed services infrastructure, it's not growing at 8%. It's rather low single digits. So you have to take into account the fact that the starting point in terms of positioning is not on par with the market and I'm curious to understand how you arrived to the conclusion that in just 1 year, you will be able to grow 5% to 7%. That's my first question.
Yes. Okay. So first, you're right. in some business lines, they are growing slowly versus other business lines, the digital workplace. Infra versus cloud is, of course, growing faster, as you can imagine. What is important is the mix for me. Of course, when I see the growth for next year or the coming years, there are some business lines still growing at 2% or 3%, and they are business line growing at double digit. But remember, 1 thing also, as somebody very well known say I want my money back.
I want my revenues back because I've been installing my revenues, EUR 2 billion for the last 2 or 3 years by some competition, which I think we should have never been the case if we were not in the financial turmoil. So I think we can regain market share also. And that's also the bets we're going to have.
So although the market, for example, in -- let's say, for example, in digital workplace or whatever is slower, it not means that Atos is going to grow at market. I definitely think we can regain some -- I would say, some of our customers. That's the number one.
That's number one. The number two is a bit tricky also. Sorry for that. I'm the bad boy. When we compare the business plan presented in September 2024, and the assumption made on the decline in costs in 2025. There were an assumption about cost declining. But when we look to the guidance for this year, so the new one, the updated guidance, the cost base or the costs are decreasing much, much faster without apparently any additional restructuring costs. Did I understand correctly? And how do you do the math? Or you do the bridge between what the company was saying, you were not there, but in September 2024.
Exactly, that's a good answer. I was not there, but I will try to answer.
But your CFO was there and today.
So first, yes, because the restructuring was also in an envelope of roughly EUR 700 million, I completely agree. I don't know, Jacques-François, you want to take this one? But I can answer if you want, but definitely I think the big difference is that in the EUR 700 million that we have, we are spending probably less on more people because we're also cautious. We are doing different things. We are, in fact, pushing much higher the billability rate than probably the plan of September.
But probably in September, and as you say, I was not there, the way it has been calculated probably was, let's say, conservative, I don't know. But this one, for sure, we know exactly the numbers, Paul, we have negotiated, I would say, in different countries. We are done in Germany. For example, after that, it will be executed in the course of H2, but normally, Germany will be roughly at the level we want by the end of this year.
So we know the cost for Germany. We have U.K. and U.S. almost down. We are continuing the job in India. So we have quite a good view on the average cost, I would say if we don't once that we are now in the different areas of the globe. And I would say the EUR 700 million of this plan is really a bottom up, I would say, a cost of restructuring, okay.
Well, the third one is a classical one for IT services company. So whatever you call it, red project or black project or?
Might change the terminology. So if it's going to be last, it's great.
I was looking rather to the project, we have between 5% project margin and 15% line margin. So the black are below 5 and red, 1. And I was wondering how much of that is easy to fix? And how much of that of those contracts will be stopped in the end just because you don't find any solution to improve the margin.
That's a good -- unfortunately, there is no one answer. Each contract is different. And I completely agree. So for what we are looking for each contract, so I'm looking at my level only have black and red contracts, okay? After that, you have the orange one, then after that the blue and the green and I would say the gold one. The gold is above 35%. So I don't look at them. I like these accounts, of course, but I would say I don't spend too much time on this one, I'm very happy when they are there.
But of course, the black, it's very important not to have any more because it decreases, I would say, the profitability of the group. If I want to target double-digit margin, of course, I need to have, I would say, a project less or 0 projects, I would say, with a negative margin or a lower margin.
For the red, I would say it's account by account vary a lot, so EUR 700 million. It's much more, of course, than the black accounts for different reasons, sometimes. Let say, for example, that we promised for some clients to, I would say, decrease our pricing by 4% or 5% for example, we were stuck by the increase in software, for example, in some mainframe contracts.
So we were completely, I would say, screwed, I would say, between increasing costs in our part and decreasing, I would say, top line. So I would say it's case-by-case. Some of them, for example, the offshoring is too low, some of them, the pricing is not correct. Of course, this one, I cannot change. So I just need to wait the end of the contract and then probably not renew this one. So it's different, I would say, topologies, unfortunately, there is no one pattern, unfortunately, in this bucket. But we look at all contracts one-by-one.
And so if you combine the black -- not the black project, Forget the black project because it will be done. The red project, what percentage of the revenue it represents?
I don't remember there, but I would say probably around 10% plus, let's say around 10%, 15%. I don't know the exact answer, we will give it to you. I don't want to give wrong numbers, but I would say it will be in this area.
Yes. And my final question is about the commitment you have taking on 2025. So you were slightly north of EUR 2 billion revenues in Q1, you said flat for Q2. So let's say, ballpark, it will be also around EUR 2 billion to get to the 8.5, means, if I'm correct, EUR 4.5 billion in Q4 with Q4 above Q3. What give you confidence about the Q4 at this stage of the project?
That's a good question. I think the first quarter was EUR 2.60 billion. So if you multiply by 4 it's EUR 2.40 billion. So we just need EUR 200 million plus. So the answer is that we need at least 100 per quarter more in Q3 and Q4.
Maybe to complement, when I was saying, do not expect Q2 to be better than Q1. This was in percentage of our growth. This was not the absolute value. This was the percentage of decline versus last year.
Because last year, we were in Q1 around minus 15%. We estimate that in Q2, we will be also around minus 15%.
Okay. I will take some -- so can you clarify in the minus EUR 350 million cash flow guidance refers to a post-interest amount? Yes, the answer is the total net cash after paying the EUR 170 million of interest. Of course, a question that I have every time in the sale of advanced computing -- 2 questions on the advanced computing. What is the sale necessary for the group financial survival? The answer is no because as you can see, in fact, we can deliver, I would say, the plan and will be cash flow positive next year.
So I would say the sale of the computing will bring more cash on the balance sheet, but we don't need that cash or we can use it for other things for sure. And then, of course, where we are in terms of this, I would say, negotiation, what are the chance to finalize the sale of advanced computing, it's a negotiation like I don't know. So we are negotiating. We have the 31st of May. We have meetings again next week.
We were in the phase, I would say, of due diligence that was intense for 2 or 3 months that is now finished. So we say wrapping, I would say the due diligence and finalizing the negotiation. It's a negotiation. So like every negotiation, I don't know the outcome. Unfortunately, I don't have a crystal ball. So I would say there is a buyer, and we are seller. So that's the good news. At least there is, I would say, a journey to find an agreement. But at the end, I would say it needs to satisfy both parties. I'm protecting, of course, I would say, Atos in terms of value for the shareholders, of course, and also for ourselves. And of course, the state wants to make sure that is, I would say, putting the right price on this asset, so we see. Yes. Go on. Yes. Take the mic because for the people online, they can.
So regarding the margin target in '28 of 10%, coming from 4% in '24. Can you give us a bit of a sense of the trajectory if it's going to be more linear? Or is it back-end loaded?
It's not back-end loaded. I make these kind of plans because if I say it's 4.1% next year, 4.2% in 2 years and then probably 10%, we will see. Now normally, you can say, I don't know if it's linear because it's not an easy game. But as you can imagine, the more the restructuring I would say, the faster the restructuring, of course, the higher the margin will come up. Remember we say we had 4% this year with the restructuring. We will gain roughly this 2, 3 points in the billability rate again, 1 point on SG&A.
And as I said, I don't need top line for that. If we stay at EUR 7.5 billion, I would say, after the HPC and the, I would say, the divestments of different countries, we have a way to be at double digit at EUR 7.5 billion, and that's the goal we have internally. And then of course, the growth will ease, I would say, some cost, I would say, a reduction. So for example, for the G&A, my target is to be at EUR 500 million. So we're 5% of EUR 10 billion. But if we finish at, let's say, EUR 9 billion or EUR 8.5 billion, then I need to, I would say, lower, of course, the level of G&A and be at EUR 450 million, yes.
But it's not backloaded for sure. It's backloaded in '25, but it's just because the pattern of our business and also Evidian and HPC business, there is a lot of value coming in fact in Q4. And that's part of also of the answer. It's more stabilized, I would say, on the Atos brands and Evidian is more, I would say, volatile in fact.
Okay. So what about the sale of MCS? So I think -- I think we were clear in the press release that there is no more sales for the moment. Not for MCS, not for cyber products. We said it's not the right timing. So we keep this to the aside. We're going to manage them. We definitely think also that with the defense, I would say, headwinds that we're going to have. There are value in front of us. And definitely, I think it will bring more value for the company and for the shareholders.
I think there's another question.
Yes. Excuse me.
Can you provide a bit more color on the M&A piece? Is this something that you do '27, '28, if you're generating cash? Or would you just think about using the EUR 2 billion that you have on balance sheet or the something next year if it's...
That's a very good question. If I don't produce cash, I won't do M&A. We will be careful in fact. So don't worry. I see some comments this morning saying it compete crazy to talk about M&A because you have no cash. No, that's not the way I'm going to look at. First, we need ambitions in a company, I can say. I can say at EUR 7.5 billion, might be and in 3 years, I will be at EUR 7.5 billion. I'm not sure I'm going to create a lot of value, but why not, it's a way. I definitely think, and you see, I would say, in my last slide that if we want to play in the Champions League, we need to be a $10 billion plus in terms of confidence.
So we need to look for that. But we are cautious. So we are not going to spend money on the first quarter of '26. And so for sure, we need -- that's why I say M&A, probably H2 '26 probably is a good window. We'll see. We see also with the guidance we're going to give early '26, mid-'26 I would say. And then, of course, with the profile in '27. So yes, we will be very cautious, I would say.
We're not going to spend money that we don't have. So first, let's produce some cash. That's the most important thing we think for the market and for the company, yes. Let me see what kind of question. Probably one for you, Clay again. Although your new commercial model and organizational structure compared to your peers and how well problem is it in practice?
Yes. So let's start with improvement in practice. So it's similar to the model we used in the infrastructure and digital workplace business in 2023, where we turned around from having about a 60% book-to-bill to having 3/4 of over 100%. So at one level, it's proven. And the specialist piece is a bit unique and an investment we're making. That's a tweak on that model because the world doesn't stand still. You can't just keep doing exactly the same thing. So how does it compare? Not many places I've seen actually bring the full end-to-end together, right, and have a single account lead in terms of the client executive that owns the full account. And I mean the full suite of services come together.
In a common sales model inside each geography, applying that model incentive structure. So I've seen bits and pieces of it everywhere, but bringing the whole thing together. I guess the common thing for most is the large deals to have separate large deals organization, and we've had great success in that, and we're very confident we'll go and deliver it again. We have confidence in it. A lot of it's been tested internally. There's a couple of pieces we have to adapt to the new offerings. And then finally, it's the fact that the end-to-end is fully there with all the incentives, I think inside the geographies is unique. I think that I don't see it in that holistic way anywhere else.
Thank you, Clay. Another question. How do you anticipate working capital in '25, given the EUR 300 million of advanced payments, which was, in fact, EUR 180 million at the end of Q1. And in fact, it's EUR 80 million for information right now. So we don't -- as for advanced payment, okay? It happens, unfortunately. So of course, if clients wants to pay, I would say, it is difficult to say no because they send the money. But as you will see, we are publicizing, putting, I would say, the right information. So you know exactly, I would say, the events payment that we have.
We have only EUR 80 million right now. It will probably disappear in the course of the year. There will be, I would say, new advanced payment by the end of this year, it's possible. We don't confirm it. In fact, I'm looking at my working capital and cash without cash advance, but it will come probably, I don't know, at the end of the year. I have no question on this one. But I'm not going to chase for it. Remember that in the past, we were asking for client payments but we're asking also for rebates.
I don't want that, okay? So I don't want to rebate. So I don't any deterioration of the margin of the projects. Is the clearance in advance, that's great, I would say. But I would say it's not, I would say, demand from us, not at all.
Have you been impacted by the U.S. administration decision? No, in fact, because we don't work with the Federal Government. Michael, who is the head of the U.S., in fact, we work mainly with private clients for the moment. We don't export also in the U.S. So I would say for the moment, we have no, I would say big decisions. In fact, what I explained is that there are on the first, let's say, we look at what happens right now, there is no big impact for us.
The impact is on our customers because they are impacting on the first, for example, the automotive sector in Europe. For sure, we have big customers in Germany, very well known that are suffering a lot. And of course, if they are suffering, they want to reduce the would say the G&A also their IT expense. So it's a second round, I would say, the direct impact on some of our customers. There is no impact on Atos per se. There are some impact I would say on some customers.
Yes. Great. One of Atos' historical problems has been significant habitual restructuring costs that ran something I think, around 7% of sales. How do you see in post '26 restructuring evolving from '26 to '28 as a percent of sales in terms of continuous restructuring.
For me, '28 would be a blank year, so year without restructuring. That's the goal we have set. So as I said, the EUR 700 million, it's EUR 400 million plus this year, EUR 200 million next year and the rest probably in '27. If we can accelerate next year and finish at the end of '26 , it will be probably EUR 300 million next year, which means in '27 will be EUR 300 million from the restructuring costs.
So the idea for us is to say, after this Genesis plan, on a normal world. Of course, I would say the IT sector is very bad. The top line is decreasing for, I would say, outside reasons. Of course, we will take actions. But I would say on the plan that we have right now, we will finish completely the restructuring cost.
Just to follow up on that. So we should expect that absent obviously whatever there is a delta between CapEx and G&A. But that operating margin should be a proxy for levered free cash?
Yes, exactly. The OEM is a proxy of OMDA minus CapEx. I completely agree. And then you have your cost of debt, and that's it. Exactly. Yes, there is a question here. I think we give them the mic. I am okay. Thank you.
It's actually a question very similar to that one probably approaching for a different angle. Maybe for Jacques-François, you seem to be very confident about 2026 being free cash flow positive. Explain EUR 400 million restructuring cost this year, going down to EUR 200 million. We're going down from minus EUR 350 million to this flat. So there is a delta of EUR 150 million that you need to improve year-on-year.
The question is, where is that EUR 150 million improvement coming from? I know that you're not giving very specific guidance about 2026, but I mean, any assumptions about the growth of the top line? Assumptions about the growth of the margin. I want to understand where that high degree of confidence is coming from and what can prevent you guys from getting to that cash flow portion?
I can answer part of it, if you want. First, there will be more operating margin because restructuring of this year translate to productivity of gains, in fact, in the P&L next year. So this year, we say 4% at EUR 8.5 billion, so EUR 340 million. So next year, for sure, it will be more than that. And then, as I said, the EUR 400 million plus restructuring will be probably EUR 200 million. So it means that the OEM minus restructuring will be positive next year. Then you have growth, and then, of course, you have the cost of debt. Yes. But you want to probably give a different answer from Jeff.
Yes. Yes.
Just to complement, I think this answer is absolutely correct. You take the page explaining how we go from 4% margin to 10% margin, you take the same drivers. We have the billability improvement. You have the delivery optimization actions, you have G&A actions. What we are doing already now with the Genesis, for example, restructuring turnaround transformation plan. Only a portion of that will be a fruit in '25. Okay? And I'm not saying that it will be 100% full swing in '26, but a bigger portion will bear fruit in '26, thereby increasing -- improving all the financials and thereby translating into the bottom cash line, if you like.
Exactly. So it's fair to say that a portion or a big portion of that EUR 150 million is coming from annualization of otitis that you're assessing.
Absolutely Yes, absolutely.
Derek, I'll take one more online then there you can take the one. What is your prospect of headcount? You target 1,000 head count reduction? Should we expect a pickup in hiring. So I think it's important to remember that the proforma goes from EUR 8.5 billion to EUR 7.5 billion without billion without Cartier and we felt the country exists. In fact, we have 73,000 people. I said to the press this morning that at the end of the plan, without Cartier, without the exit, with the restructuring, we finished at 60,000 people roughly, probably a little bit less.
And then, of course, there will be growth next year. So they will be hiring also. So it's a bottom. And then after that, of course, we're going to restart, I would say, of course, recruiting, but we continue recruiting just because we have also an attrition rate of 14%. So for sure, we are regenerating also or, I would say, the pyramid age, it's very normal. But I would say if we say at EUR 7.5 billion, with the country, with the finish of the restructuring, and without Cartier, probably around 60,000, but we will probably more next year.
Sorry for the follow-up. Derric, from Bernstein . The first one is on the fact that you don't talk about asset-light strategy. In the past, we know that Atos has a lot of data centers around 100. What about this data center? What about the relationship with the hyperscaler and the fact that you will in the future, probably or potentially transfer part of the business you do on private cloud or hosted private cloud to public cloud? And how you will, let's say, restructure?
That is a good question. In fact, that's a Genesis practice turnaround in fact, there are around the three turnarounds, and that's one of them, the mainframe. So the number of sites we are closing, we are regrouping some sites. So there is a big also restructuring in that part.
And it's included in the EUR 7 million?
Yes. Exactly.
And the second one is more simpler. It's about the utilization rate, as that has ever been at 85%, that was my first question. Second question, we know that with IT services company, the way you calculate the utilization rate different from is different.
Already different from the competitor?
And sometimes, the system is not efficient. So i.e., you can hide some people here and there in projects and they are not counted in. So what's your thought on that? And do you think that the current system and the way you measure non-productivity is okay?
I cannot say that 100% it is okay. Probably Jacques-François has another view. The answer is that I track head-by-head and Euro-by-Euro So every month, I know exactly. So in fact, we have a project margin, which is margin on project. And then we have a gross margin, which is, I would say, the [indiscernible] rate plays in this, I would say, with presales, R&D, bench, et cetera.
The way we calculate it is probably most, let's say, a little bit tougher than the competition. So for example, some competition, they said around 90. There are 90, 91 is close to over 85 because I put everybody in fact, to make sure we look at the people that are on build. So for example, e-Mails, et cetera, are in the billable rate for us.
And then there are some in less we pay in some countries, and there are some countries we don't pay. But we look at it by head and we look at it by Euro. And it's very important. It's both in fact. So in the , I will still see it. I would say in Euro because between the project margin as a percentage and the gross margin, I see exactly what happens.
And the second question about cost was on subcontracting costs. It has been very volatile up and down in the past. What's your view on that? And what's the target in terms of as a percentage of sale?
That's a good question. I don't have a view on this one because for some countries, it makes sense at all. Like Belgium. For some countries, it doesn't make sense at all. So we have, I would say, more in, for example, in the U.K., in Belgium, probably less in France. So we are looking at the number of people we have right now on subcontractors. We are reducing roughly around 1,000, I think, since the beginning of the year or the beginning of Genesis. But there are also levels where we cannot go below, I would say. So there is no philosophy to say I want only, I don't know, 5,000, 7,000, it doesn't make sense.
It's country-by-country. because it depends, I would say, also on the way, I would say, the country they manage, I would say, the workforce. So there are countries with higher, I would say, subcontractors than other countries. But we are looking -- in fact, we had around 7,000, I think, subcontractors. Right now, we look one-by-one if we can replace these people by bench for sure. But it's not automatic, unfortunately. Yes.
Yes. A couple of follow-ups on my side as well. David from ODDO. Regarding free cash flow, so it's very clear about restructuring costs, but there's also a lot of some other cash elements linked to future losses on contract, which has been provisioned over the last years. So are this including the EUR 700 million bucket or come on top.
So on top yes, EUR 700 million is really the restructuring. The black account because that's the other one that are bleeding, I would say. There will be very little cash in '26 because most of them will be closed. There will be two. And it will be probably maximum for probably maximum EUR 50 million of cash out next year. It's still a lot of money for us, probably below that, but I would say it has been much more as you can imagine in the past. Yes.
So EUR 50 million next year and this year?
Maximum EUR 50 million. This year, a little bit above EUR 50 million. Yes.
And my second question is, is there a path towards more asset disposal if something -- I don't say nothing goes wrong or if you see some opportunities to dispose some assets at a good price in order to get more liquidity and then buy back some debt in order to reduce the cost of debt? Because you didn't discuss so much about this topic about optimization, the cost of debt.
The question, you know what? At the Board level, I think we are always questioning, let's say, at least once a quarter, of the portfolio. So there will be probably opportunities. But I would say for the moment, that's not the question. We keep the company as is. We don't need, we say, to sell an asset to have more liquidity. Now the cost of debt is 10%. We know exactly with the 1 and 1.5 in exactly the cost.
As I say, we have also penalties to remember the debt, you know that. And it's much better, I would say, in December '26. So we need to make also versus the cost, I would say, of refinancing and the cost of debt, what is the right technique for us? So this is for me a subject of H2 '26. It makes sense for sure. If we produce cash next year, we'll have more cash than I would say we need probably in the balance sheet. So it will be, I would say, an exercise we're going to do, but it's too soon for us to do that. And then selling assets to remember that, I'm not sure we create a lot of value. That's my view, but probably. Of course, if we said the effect at 15x, EBIT, probably yes, but I'm not sure that it will be the case, unfortunately.
Maybe MCS could be sold at this price.
Yes, of course, yes, that's a lot of money.
And last one from my side, regarding tax losses carry forward. Could you help us understand how we should value that or when could we see some activation and impact on your cash and to help us see if there's value there.
There is value because we are in the balance sheet. Now the question is when the value translate into cash, that's a big question. Yes.
Yes. No, I think the numbers of the tax losses carried forward are public. So you know we have a multibillion. I can only encourage you to be cautious in valuing these items. You have seen the evolution of our tax line in the last years. In fiscal year '24, we have written off some of the deferred tax assets. So my position is to be always very prudent in valuing that. It doesn't mean 0, sorry, I don't give you a perfect answer, but it just means that I want to be prudent and cautious.
We need to help to put the right number in the model, but remember on the tax, we have tax on sales, like in France. Unfortunately, you are profitable or not, you pay the tax. But you have a taxes, but you see continue to pay tax. It's a nice country. And we have, in fact, taxes in different countries, and it's not only in France.
India, for example, we have one. So it doesn't mean that we can activate in fact, this tax loss even in some countries where we are, I would say, we have benefits. So we have to be very careful on this one. yes.
I have, I think, last one. Will Atos ensure the successful execution of the Genesis plan cost reduction and operational efficiency measures, particularly in optimizing service delivery and reducing G&A cost to 5%?
Well, I don't know what to answer to this one. But I would say it's a question of focus for me. So we have a VP in charge, I would say, of Genesis. We have different people working on the different streams. We look at them, I would say, on a weekly basis. We follow them. We track them, I would say.
So I would say if you control, if you track, I would say, and you have the management attention normally, it happens. So I definitely think that normally should -- there is no reason that we should not achieve, I would say, these goals. Yes one more Daure, but more if you want.
I wanted to ask, when you look at the operating margin rate, you have that bridge that goes from 4% to 10%. So how much of that gain is cascading and how much it comes from restarting your top line and operating leverage?
In fact, most of it come from cost cutting, as you have seen. There is profitable organic growth, you've seen that, but I think it's less than 1%. I definitely think that we can probably do better in this one because, in fact, if I say, for example, my G&A is EUR 500 million, and we'll keep it at EUR 500 million for EUR 10 billion sales. And even if I grow I would say, more -- the base, I would say, is still the same.
So it means that the marginal margin, I would say, of the growth probably is more than 10%. So I think we have been a little bit conservative in this way. But like a plan, it's always things -- there are things that we will do better. Since we do probably less better. So I would say, in the plan for the moment, most of it comes from the restructuring in fact.
Yes. This is Dan Galfor from Bernemok. Thank you so much for answering our 100 questions. I also want to complement the IT setup. It's very impressive.
We are an IT company.
So we talked a little bit about the black contracts and so those are going away. And then the restructuring costs are kind of going to 0 over the next couple of years. I want to see, are there any other kind of one-off adjustments to EBIT or kind of below the line expenses, consulting fees or other reorganizations of the business, things like that, that we should be aware of that?
In fact, the consulting fees part of the EUR 700 million, so it's envelope, of course, for the departures and also the consulting that we have. But as I say, consultants, most of them were probably all of them will be out of the company in July. So we have finished, I would say, the strategic path.
We are continuing, I would say, on two topics with some of them. And there are also people helping us, I would say, on the Genesis program. But most of it, I would say, is it will be out. And if we continue, it's not going to be a restructuring cost for me. It is a normal cost that should be in your. So you won't see that, I would say, below the line.
The only probably things that we didn't put any amount is the litigation that we have in course. We know, for example, that we have a [indiscernible], we have, I would say, some provisions in the balance sheet for this. There are two or three cases like this. And frankly, we don't know the timing and the amount. But that's the only, I would say, for the rest, I think everything has been taken into account. The only thing that we have, I would say, it's difficult for us, I would say, to forecast is really, I would say, the litigation outflow.
Okay. No more questions. I don't know if you have questions in -- okay, I think we are done. So as I would say, as a conclusion, I think it's very important that you understand that focus, I think, is very important. So first, we have a plan. We have an organization. The organization, we have the team. The team is going to, I would say, now deliver the Genesis plan, I would say, on the strategic plan.
And probably what is more important is that we have to wheel that for us. So we have definitely -- we think that we can do it. We are very happy, I would say, to do it. I'm very happy to have joined I would say this is a fascinating company. I definitely think that this company deserves, I would say, to be successful in the future.
And I will put all I would say, my energy and the energy, of course, of the team to make it happen. So Atos is back. Thank you.
Program of technology. So if you want to stay a little bit more time, we have workshops for the different business lines for Evidian also and for the six business line of Atos where we have some staff showcasing, I would say, some different -- I would say, client example. So if you want to understand what do on smart platforms, more on cyber services or whatever. Don't hesitate. There are also, of course, some beverage, of course, and tea or coffee.
And I would say all the team also is staying there, so we can answer also your questions if you have other questions that you want to ask during this.
Thank you again for your time. Thank you very much, I will say, to be with us. I think we are very proud of what we have achieved, I would say, with this plan. And now you can, I would say, trust that we will make it happen. Yes, thanks.
