Good day, and thank you for standing by. Welcome to the Atos Q3 2023 revenue conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Atos management team.
Thank you very much. So, good morning, everyone, and thanks for joining us this morning. So, I'm joined today with Paul, who will follow me, and as well with Nourdine and Philippe, that you all know, who will intervene during the Q&A session. So thanks for all of them to be here today. So, I'm going to start to give you a brief introduction. I will hand over to Paul, as I said, to take you through the group and business performance in the quarter, and then we'll open for the questions. So, first of all, some key takeaways.
Well, as you know, I just joined recently after 30 years in the technology sector, and I've seen first-hand Atos technological capability, but as well, the highly talented team, the leadership and all team across the globe. So since I joined Atos earlier this month, I've been really impressed by the total commitment and dedication of everyone of Atos to deliver the plan every day with clients and their team. So what I did is that I spent time to better understand their operation. First, at Tech Foundations, with all infrastructure, digital workplace, and all the other strategic services that they do today, but also with Eviden, across digital, cloud, digital security, and advanced computing.
So for me, it is extremely clear that the business have significant opportunity to capitalize on their strong position across many strategic areas that are extremely differentiated and sometimes unique. So obviously, why focusing on the operational performance and commercial momentum? As we already communicated, we anticipate a shareholder meeting to take place early Q2 2024, with an investor day to occur slightly before. And finally, I want to insist that we are fully committed to an ongoing open dialogue with all of our shareholders, obviously with all of you today. So now let me turn over to Paul, and who will cover the Q3 financial results. Thank you, Paul.
Well, thank you, Yves, and greetings, everyone. Let me start with revenues for the quarter and year to date. Group organic revenue was down 3% for the quarter. Eviden was up 2.3%, partially offsetting a decline of 7.2% in Tech Foundations. I'll cover the revenue performance and commercial activities of both Eviden and Tech Foundations later in the presentation. Year to date, group revenue was up 0.6%, with a solid revenue growth in Eviden offsetting decline in Tech Foundations. For the full year, we remain on track to meet our revenue growth target for the group of 0%-2%, as well as our guidance for both Eviden and Tech Foundations' revenue growth.
Turning to our revenue performance by region, Southern Europe was up 3% on solid contributions from HPC and digital security. Central Europe was relatively flat. Northern Europe and Americas were down 2.5% and 13%, respectively, and those reflect the impacts of delays in contract awards. Americas was further impacted by lower volumes in cloud licensing in the U.S. and a tougher comparison with the prior year, which benefited from a large completion of an HPC contract. We expect America's revenue to stabilize in the Q4 and be relatively flat compared with the prior year. Revenue breakdown by region is highlighted on the right side of this slide, showing a balanced revenue mix across the regions. Turning now to order entries in the Q3 for the group, and let me remind you that Q1 and Q3 are seasonally low quarters for us.
Order entry in Q3 of 2023 was EUR 2.2 billion, up 10% over the prior year on a reported basis. Order entry growth would have been higher, adjusted for the divestitures. The book-to-bill in the quarter was 84%, compared with 71% in the prior year, and we expect a stronger book-to-bill in Q4. Total headcount for the group was 105,000, roughly, employees at the end of the quarter, which was down minus 2% compared with the end of H1. Our attrition rate was about 16% on a trailing twelve-month basis, down compared to the end of H1. Let me turn now to our Q3 performance by business.
For Eviden, the revenue in the quarter was EUR 1.2 billion, up 2.3% organically, reflecting strong growth in digital security and stronger performance in digital in Europe. The performance in Europe was driven by demand for application development and modernization. In the Americas, revenue was down, reflecting the impacts of delays in contract awards, lower volumes in cloud licensing, as mentioned earlier, and a tougher comparison with the prior year, which benefited from a large completion of an HPC contract. And as I already mentioned, we expect America's revenue to stabilize in the Q4 and be relatively flat on a year-over-year basis. Eviden year-to-date, excuse me, on a year-to-date basis, revenue was up 5.5% organically. Now, Eviden book-to-bill was 80% in the quarter, in line with the prior year.
As a reminder, bookings are seasonally low in the Q3, and therefore we expect a rebound in bookings activities in the Q4. In the quarter, the Eviden business continues to make progress in gaining new logos across all four offerings. Some key wins are highlighted on the slide. They include an application integration contract with a government agency in digital, and a large cloud transformation contract with a large luxury retailer. Eviden also signed a digital security deal with a major transformation company. And lastly, as we already mentioned, Eviden won a contract with the first exascale HPC, which is clearly a testimony of Eviden's leadership in advanced computing. Now, let me turn to the Tech Foundations. Revenue in the quarter was EUR 1.373 billion, down 7.2% organically, and minus 4% for core revenues.
The business continues its portfolio rationalization with a reduction in its non-strategic activities, including hardware and software resale and BPO. The company recently sold its UCC business, which was declining and impacting year-over-year growth comparisons. Year to date, revenue was down 3.5% organically and down 1.9%, excluding non-strategic activities. Book-to-bill for Tech Foundations was 88% in the quarter, compared with 58% in the prior year. Tech Foundations added a new logo in the quarter with the major telecom companies in the U.S. The business will be helping that client modernize its mainframe environment. Other key wins in the quarter, including a contract with the European Commission to support their cloud transformation and automation plans. Tech Foundations also signed a contract with a large gas and electric company to manage the workplace environment for their 30,000+ employees.
So in closing, we are confirming our 2023 guidance for the group. We would expect growth organically to be 0%-2%, operating margin of 4%-5%, and free cash flow for the full year of about EUR 1 billion, and to be precise, -EUR 969 million, which, negative, which is really, implies in H1, H2, excuse me, a free cash flow of flat, for the semester. At the business level, Eviden is targeted to report an acceleration in organic growth compared with the prior year, and an improvement in its operating margin year-over-year. Tech Foundations is targeted to show core stabilization as the business continues to rationalize its portfolio, and we expect Tech Foundations' operating margin to be targeted to be positive for the year. With that, we will now open the line for our questions.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by, we will compile the Q&A roster. This will take a few moments. And now we're going to take our first question, and it comes from Frederic Boulan from Bank of America. Your line is open. Please ask your question.
Hi, good morning. Thanks for taking my question. Firstly, I know it's early days. I think you've been here for less than a month, but we would love to hear your thoughts on Eviden, when you look at the growth prospects for the business in the medium term, specifically next year. You know, we have some of your peers, including Accenture, guiding for 0%-3% organic growth for next year. So we'd love to hear how you think Eviden can fare in that environment, and in particular around the cyber unit. And then secondly, if you could give us an update on your disposal plan. So both the already announced EUR 600-700 million plan and the new plan, in terms of cash impact, you know, what we can expect, this side of the year and next side of the year. Thank you very much.
Well, I will thank you for the question. I will take it and ask Philippe to complement as we are working close, close together. Obviously, today we are commenting the Q3, and I will not comment about any guidance for next year, which is not the scope of today's focus. I started to learn by, you know, meeting the team with Philippe on the four key offerings around cloud, digital, security, and all the high-performance computing activities, which is not just about hardware, but as well, all the services around. So, that has been the target, you know, to put all those added value services. And I think what I've seen in it is there are two things.
One is there are differentiated capabilities in terms of their focus to the new technology, whether it's in cloud, focusing on the, you know, migration to the hyperscaler, but as well, all the SaaS applications that are absolutely strategic, in which is most of the scope that we have within digital. Then security and HPC, which includes a lot of IP and assets. I think back to your questions, what I see extremely differentiated from what I know from the market, is that some of the offerings are absolutely unique. If you just touch the HPC, combined with the AI capability of the group with Eviden, this is unique in the market. If you want to set up an LLM environment in a for a sovereign, with a sovereign objective, you know, to secure your data, there is no other offer in the market.
So this is one example that I think will help Eviden to keep being very differentiated, that for this, there is no competition that exists. So, for that, I'm pretty confident that then it's our ability, you know, to push it and present it to every client. But all of them, all of those four offerings are extremely relevant, I believe. Then when it comes to the disinvestment, I think that was your second part of the questions. I cannot be precise on that. Maybe Paul will comment back because we are currently looking at it, and we will communicate later on which activity we believe will be in scope. But maybe first with you, Philippe, about any additional comment, and then Paul, for the disinvestment.
Yeah. Hello to everyone, it's Philippe. So just you remember that, as Yves is mentioning, we have decided to heavily capitalize on what is making us different, and what is setting us apart from the competition. To first reposition the company, extracting more operating margin. And also, you remember what I was saying, that is always we stopped running after everything that is active on the market. We are now ring-fencing our focus around the key areas. I think the perfect illustration, and Paul started to capture that in the reference that you're and deals that we signed. We are starting to make terrific progress on our ability to embrace the Generative AI growth.
And I know that many, let's say, core services providers on the market are all, let's say, focusing their effort and re-positioning their resources on generative AI. But there's one item that are, is very, very strategic, is that we are now the sole unique providers that can build up generative AI for very large corporates that believe that it matters to protect their intellectual capital and their knowledge base model by structuring those generative AI capability, in a protected environment. And when I say protected, that means not only relying on the core servers that we have on the advanced computing part, but also making sure that we are protecting the three main pillars that are: who is getting access to what, that's the identity management software portfolio that we have.
How to encrypt and protect the data, that's everything that we're doing with the level of encryption that we have on the cybersecurity side, and also managing the threats and cyberattacks through the managed detection and response. So we are coming together in terms of integrated capability to make sure that our clients are understanding the integrated value prop that we have. And now with the rise of exascale requirement for deeper learning capability, and especially not only are relying on scientific calculation, but starting to build, let's say, learning machine model, that's what is setting us apart. So it's a great momentum. We have a very strong pipeline, as I mentioned before, especially around our our new dedication of high-performance computers for generative AI, and we are really starting to see the momentum going up.
This is to your question, one example that I was referring, that Philippe has detailed, and that's where I think to be even more differentiated. When we refer to all those four capability, we need to more systematically bundle those offerings together as the example of Generative AI, which will help, you know, to respond to client needs. So that's a focus we have together with Philippe. Maybe, Paul, on the disinvestment.
Yeah, on the divestitures, there were two programs, as you recall, Frederic. The first one is the EUR 700 million plan of asset disposal that was announced last year, and this one, this program is completed. And so that would be part of what we had termed, w e would do this half a year. I think we said EUR 250 million-EUR 300 million was remaining of both the EUR 700 million program as well as the new program. The new program is a EUR 400 million asset disposal. So let me go back. EUR 700 million from last year, this program is gonna be now completed this semester.
The EUR 400 million program, we have two deals, one closed, and will be part of our EUR 250 million to 300 million this semester. The other one is signed, we haven't collected yet the money, and we're still ongoing discussions on other assets that make up the EUR 400 million program, and most of that will be happening next year.
Thank you, Paul.
Sorry, if I may clarify, Paul, thank you for that. I think on the EUR 700 million, there was something like EUR 500 million remaining. You already cashed in EUR 200 million, unless I'm missing something.
No, no, I think you're wrong. It was. We had done EUR 500+ million, close to EUR 500. There was remaining a couple of hundred, EUR 200 million, and that's what really is.
Okay.
Being completed.
Right. Okay, thank you.
Thank you.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Now we're going to take our next question, and it comes from Nicolas David, from ODDO BHF. Your line is open. Please ask your question.
Yes, good morning, and thank you for taking my question. I have a few of them. The first one is, when we look at the deterioration of growth of digital in Americas, could you share some color about the trends during the quarter? I mean, this deterioration was seen throughout the quarter, or was it more an acceleration in September? And what do you see for this specific area, digital services in Americas for Q4? My second question is, what makes you confident to reach even the lower end of your growth guidance, when you are actually at 0.6% organic growth after nine months? And I remember that comps in Q4 overall are pretty tough.
I mean, I understand on the big data side that you may have some rebound, but excluding the big data, it looked like you are embedding some decline for Q4. So, what, especially if we exclude big data, makes you so confident that you will stabilize the situation and reach the lower end of your growth guidance? My last question is, do you think that you need, given this kind of a weak Q3 and maybe a Q4, even if you are, the guidance maybe would be a bit lower than what you were expecting initially, given the macro environment, would you need some cost-cutting measure additionally to what you are already doing, obviously, with the restructuring plan, in order to preserve the margin guidance? Thank you.
Thank you. What I would suggest is to start with Philippe and Nourdine to give us their view on the Americas market, and then Paul, covering the guidance and your comment on Q3 with cost cutting. And then I will complement after Paul, if needed.
Yeah. So for the Eviden business, because you mentioned digital, but it's not only digital, and you know that we are not breaking down, let's say, or by region, let's say, the revenue numbers between digital and BDS. But there's one point that I want to mention. I think Paul touched base on this topic, is that on the Eviden side, we were, let's say, suffering from a very difficult compare because we had a massive transaction last year that was an HPC delivery in South America that was quite a big one. And that's penalized, let's say, the comparison in terms of organic growth year-over-year. One of the key points is that, and I prefer to be very transparent and honest, yes, we are seeing a slowdown in terms of decision-making process in the U.S.
So that didn't impact heavily the run rates that we're seeing especially for Q4. But you remember that in the Eviden profile, like what we did last year, we mentioned, and I mentioned specifically last year where we deliver 11% revenue growth in the Q1 that this year has the same kind of profiling. That means, we are back-end loaded, especially on transactional sales, not only on the BDS part, but same thing on the digital one, with some strong delivery milestone, that will trigger, let's say, large invoicing, in terms of top line for the Q1. But one of the key points is that, is that, yes, in the U.S., we are seeing a slowdown in decision-making process, as you mentioned, like what the entire ecosystem is currently observing, on the U.S. ground.
All right, let me pick up. I'm sorry.
Maybe Nourdine, and then we.
Yeah, quickly. Thank you.
Thank you.
Thank you, Yves. Just on the TF side, the business is still holding, I will say. You saw the book-to-bill, and especially in the US, where the team did a fantastic job in signing a multi-year contract transformation of the mainframe activities of a major telco, which is a contract of more than EUR 100 million plus, yeah? So yes, it's true that H2 is a weak point, but if you remember, we were mentioning that we will need 12 months to recover the sales engine in the US on the TF side. So I'm pretty positive about next year evolution of the TF market.
Thank you, Nourdine.
Thank you, Nourdine. So your next question is what makes us confident that we're gonna be meeting the 0%-2%, given that we're at 0.6%, you know, year-to-date? I think what, again, you heard from both Philippe and Nourdine, we expect the Q4 to show solid growth in both sides of the business, even compared to the prior year on an organic basis. As far as the margin, the guidance that we have given, a number of initiatives were clearly underway, you know, not only at the beginning of this semester, but throughout the year. That gives us confidence that we will hit our guidance on the operating margin. Thank you.
And maybe to follow up on Philippe's comment, it was really helpful. But so if I understand well, so you see some longer decision taking from clients, which is not really impacting the business right now, even not really in Q4, because you are executing your contract. But if I understand well, it could- it will rather be a problem for next year if it continues like that in Q4 and if the demand is not better, right? I understand well.
Yeah. The point is that we have a strong pipeline in Q4. And so far when we are projecting, let's say, the pipeline also for the H1, 2024, we remain really confident on our ability to extract the book-to-bill that is required to execute on the trajectory that we had. But same kind of comment, you remember that we have a big part of the revenue that is especially on the BDS that is coming from transactional sales that is less, let's say, walking through a percentage of completion revenue recognition scheme. So, and we have the same story than what we've seen last year. Many transactions are especially on the BDS part, are in decision making in the Q4.
Thank you.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one, one. Now we're going to take, m y apologies. There are no further questions at this moment. We'll just give a moment to generate more questions. And now we have a next question come through. And the next question comes from, from the line of Laurent Daure from Kepler Cheuvreux. Your line is open. Please ask your question.
Yes, thank you. Good morning, gentlemen. A couple of questions from me as well. The first one is I'd like to come back on the, the divestment, but on the cash inflow, more precisely, not closing the deal, but when the cash gets in, can you give us some details of what you expect for H2 this year, and the, what is the remaining for 2024, hopefully in the first part of the year? Also, from your comment, I heard about, if I got it right, EUR 250 to 400 million already booked, but I have not seen any press release on this. So could you detail a bit more? So that's the first point. The second one is more generally, there's a lot of bad press or, about Atos on the balance sheet, on maybe the spin-off.
How do you deal with client relationships? Does it really impact the business about closing new deals? So any comments around that would be useful. Third point is on the new contract that you won. You had some major issue in the past on the pricing. Some of the contract you won from competitors, and no competitors were not making huge margin on the contract you won. I'm thinking about Framatome. So how did you manage to get this contract on high profitability? And my final question is on the slowing growth at Eviden. Just want to make sure it won't have an impact on the trajectory on margin you were expecting a few months back. Thank you. That would be all for me.
Would you start on these investments?
Yeah, I'll take one and three, since they are financial, and I'll turn it over to Philippe. On the divestiture side, I think we said EUR 250 million to 300 million of proceeds this quarter, sorry, this half. We two deals that relate still to the EUR 700 million original plan have already closed, and you have not, we, as we mentioned one of them already, which was the UCC sale that has already occurred, and it's just occurred past the quarter end, right? The other one also will be coming in any time now, and so that, those are two contracts that will close out the EUR 700 million original this divestiture. Out of the EUR 400 million new program, I mentioned that one of them has signed and closed, and another one has just signed.
So if you take those three, 2 from the 700, 1 from the additional program, that would represent EUR 250 to 300 million this semester. They'll be, they'll be happening in the Q4, actually. We'll be reporting on those at the end of the year results. Very, very consistent with what we told you back at the beginning of August. In terms of the Eviden trajectory, we are on track to deliver on the margin expectation for the business, for the H2, as well as for the full year.
Thank you, and handing over to Philippe, you, as an introduction, you refer to client conversation. Obviously this is a must-have conversation with most of the client, and I know Nourdine, Philippe do it. I do some of it as well, because the, y ou use the word bad press. Obviously, it requires to re-insist on our engagement and confidence about our teams, our offerings, and our ability to deliver for clients. So, it's not a problem in terms that the outcome of the conversation are always right, but it requires to take more time than usual indeed, to re-explain and secure the confidence that we do have collectively with and for our clients. So m aybe Philippe and maybe Nourdine as well to comment on client relationship.
No, but basically, hello, Laurent. So, basically, yeah, I think or Yves explained precisely, yes, that's that especially in France, where we have all this bad press and all the noise on the markets, are each requiring, let's say, some very strong senior executive focus to help our team on the ground to explain our capital structure story, or what is running underneath the separation program, and to ensure, let's say, long-term commitments, both in terms of operation and also in terms of financials. So far we have dedicated structure that is helping our team on the ground to ensure that we are giving, let's say, clarity to our clients, or especially when they have to make, let's say, long-term strategic decision.
And that's both for Tech Foundations and Eviden. But I will let Nourdine comment on how he's dealing with winning back clients like Framatome on the market.
Thank you. Thank you, Philippe. So indeed, the noise in the system is not helping us, especially in France. And as you know, it's on outsourcing, we are selling multi-year contract. Yeah, so it's about trust, it's about partnership, and thanks to all the team on the ground that are able to maintain those relationship, those strong relationship with the customers. So such as the contract you mentioned, Laurent, that we signed, and I will clarify, the contract is not exactly the same scope as the previous one. Yeah, so the customer split it in different lot, and indeed, we won a significant lot with margin, yeah. So the strategy has not changed. Okay, you could believe Paul.
Paul is also on top of us to make sure that all the deals are being signed with the right profitability, so there is no degradation, or we are not going back to the previous model, which was signing some deals with weak margins, yeah.
And maybe thank you so much. It's very clear, Nourdine. If I can ask a very last one: In your opening remarks, you said you were open to discuss with your shareholder, but on one hand, you have a growing disagreement between a few of your shareholder and the plan, and you are still committed to do this spin-off. So what is left to discuss, to discuss with the shareholder? Are you do you have a bit of flexibility, now that the chairman is gone? So where do you stand as of now?
Well, I mean, let me answer with Paul. A strategy has been set in order to separate the company in two. There were two key activities with Tech Foundations and Eviden, so this is getting executed. In parallel, what we are doing together with Paul is working on our financial model. Obviously, there are things that we are adjusting and fine-tuning, and this is why there is some time needed before we go to the shareholder. So we are doing a continuous proactive activity to listen with them and preparing our recommendation.
Yeah, no, let's just build on what Yves said. We continue to progress on the plan that has been laid out there. We're in active discussion with the EPEI on certain parameters, as we stated about a week ago, nothing has changed. We also are working with our banks for a refinancing post-transaction. Again, all of these matters will be brought to the shareholder at the appropriate time for their review and consideration and ultimately approval in due course.
Can you confirm that, from the balance sheet standpoint and liquidity standpoint, you will be supported by the banks till 2025? Because you referred to the next milestone only being in 2025.
I think we made it very clear on our communication a week ago that should the contemplated transaction be approved and the capital raise be approved by the shareholders, that we had a funded plan. But it was based still on closing the negotiation that we're currently having with our banks for refinancing our Term Loan A coming in January 2025. The second thing is that should the transaction does not go be approved and that doesn't we don't proceed with that transaction, a contemplated transaction, then we said that we had adequate liquidity to fund ourselves through 2024 based on you know accessing still the you know factoring program that we had as.
B ut we also said that then we will have to just still take actions to look at the maturity schedule that of that EUR 1.5 billion of Term Loan A that comes due in January 2025, and consider alternative if that transaction also does not go through. So nothing's changed again from what we said. I'll refer you back to what we said on a week ago.
Okay. Very clear. Thank you, gentlemen.
Thank you.
Thank you. Now we're going to take our next question. Just give us a moment. The next question comes from line of Gianmarco Conti from Deutsche Bank. Your line is open. Please ask your question.
Hi there. Yeah, thank you. So, I have just two questions, two broad themes. The first one is, could you discuss in a little more detail the portfolio rationalization? Are you ending client relationships that are simply not profitable anymore, or simply renegotiating the contract at a better long-term deal for Atos, but impacting it short term? My second question is, could you discuss a little about the attrition rate and employee headcount evolution? Are you having some trouble retaining talent? Was the headcount decline mainly in Eviden or CSCO? And how is your offshore leverage looking so far? Thank you.
Thank you. So two questions. The first one, I will hand over to Nourdine, where most of the portfolio management is happening.
Yeah, thank you. Thank you, Marco, for the question. So, clearly, we have selected a piece of business. You remember, I think initially when we started the plan, close to 13% of our revenue was underperforming, yeah, in Tech Foundations. So since last year, we have been working on that segment in trying to renegotiate it, as you mentioned, and some of them have been terminated, which is generating part of the managed decrease that you are seeing in the figure of Tech Foundations, and some of them have been renegotiated by some descoping or price renegotiation. So yes, you have all those kind of execution on the ground, and the team is still following that trajectory. I think we reported at the end of H1 that we were achieving now less than 8% of our revenue, underperforming, and the team is still continuing on track.
Let me take this headcount evolution, and I'll pass it to also if, maybe if he has additional comment. But I think the slide that we had shared with you just make it very clear, we have no problem hiring, attracting talent, obviously. But we added 3,600 folks in, you know, in the quarter to the company. In terms of attrition, the attrition was 16%, and it's pretty much even between the two businesses. And it's really better than when you look at it compared to what it was into the 12 months ending H1.
We are increasing our access to offshore talent to respond to the demand, because that's, as you know, part of the strategy in both business to increase the leverage of the, let's say, the best shore capability offshore, but as well, some nearshore talent.
Yeah, how much is it? It's close to 50%.
Okay 50%
[Crosstalk]
Offshore.
Just a quick clarification on that. That 50% offshore, could you split it into Eviden and CSCO?
Yeah. Historically, and this is evolving for both, there is more offshore capacity, which came initially from the acquisition in the U.S. But both are increasing as we speak, the leverage of offshore. But maybe any complementary comment, Nourdine or Philippe?
No, but just to reinforce, and, you remember, and that's what we said, that that was part of our operating margin improvement plan. We are perfectly executing on the maximizing the penetration of our global delivery center in our solution design model and in our implementation engine. And so far, yes, on the Eviden side, we are above 50% of global delivery penetration in our delivery operation.
Fair enough. Thank you very much. Just one last follow-up about Eviden. How much of the guidance margin do you think will come from pricing, particularly in Eviden? And are you still doing some kind of inflation, maybe price increases or are you trying to, you know, sort of retain those customer relationships without any additional pricing? Thank you.
Yeah, we have four main pillars that Paul and I let's say already are exposed. One that is coming from the rejuvenation of our pyramid in low-cost country. The second one is global delivery penetration, the third one is price increase, and the last one is increase in our billable utilization rates. So that's the four let's say core items that we've implemented, let's say, close to a year ago now. And on price increase, we are. We have both capability, as Nourdine mentioned, some contracts where we are embedding, let's say, renegotiation clause to pass, let's say, the cost inflation in price indexation. And we have, let's say, multiple contracts where we have integrated those price negotiation in the core contract, in the pricing scheme.
On the other, it's continuous improvements and continuous negotiation with our clients to limit and to offset the compensation increase of our cost in our cost base and to protecting, let's say, the operating margin trajectory.
Understood. Thank you.
Thank you. I understand from the operator that we've been going through all the questions. So, thanks to all of you for asking those questions. And thanks to Paul, Philippe, and Nourdine for being together today to answer all of those. So, maybe to close with some key takeaway, I want to insist on, first of all, as a team, we are focusing on operation performance and financial discipline, which is to reflect to the last comment of Philippe. We are making progress in executing on our transformation plan. We are, as Paul said, reconfirming our guidance for the full year, and we remain extremely committed to an open dialogue with all of your shareholders, as obviously we did today with you. So thanks again for your participation, and have a great day. Thank you.
That does conclude our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.