Bonjour tous. We're going to speak in English. Hello, everyone, and welcome to the Atos Capital Market Day. We are delighted. I'm going to take my documents because they have cut the teleprompter. To have the opportunity to speak with you today about the future of Atos and its contemplated transformation plan. As you know, our transformation journey doesn't start today. Since I joined as a CEO in January of this year, we put in place a simpler organization to refocus our growth on cash generation under the helm of a strengthened senior executive team and with promising early results in stabilizing the commercial momentum of the company.
Following an initial comprehensive strategic diagnosis of the company run by our board of directors under the chairmanship of Mr. Bertrand Meunier, who is here with us today, alongside with the other board members, among whom René Proglio and Fares Louis , whom I do salute because they are in the room with us today. Thank you for your support, gentlemen. We now have all the elements in place and are now ready to consider the next steps in our road to recovery with an ambitious transformation plan. Through this process, the board and the management team are committed to being result-driven and transparent, as we have highlighted since the first days I joined the company. I'm sharing the scene today with some of my colleagues who will play a critical role in the company's transformation journey. St é ph.
Diane, first on the list, our CSO who joined us recently from Suez, where she spent 15 years in leading corporate and business position, and where she more importantly, if I may say so, she supervised the carve-out of Suez into two companies. Stéphane Lhopiteau, our CFO, who joined us on May 1st. Philippe Oliva, who joined on April 1st as Chief Commercial Officer of the group. Philippe has an extensive international background in the digital sector, having spent almost 20 years at IBM, where he notably served as Vice President for Integrated Technology. He headed the cloud services and hybrid services in North America.
Presenting today, we have Jean-Philippe Poirault, our Head of Big Data and Security, who joined us in September 2019, and Rakesh Khanna, our Head of Digital, was previously the CEO of Atos Syntel. Ending this presentation, Nourdine Bihmane, our Head of Tech Foundations, with 21 years of experience within Atos. For the closing remarks, of course, we have our chairman, Mr. Bertrand Meunier, will close this session today. I also want to praise the rest of our outstanding leadership team, many of whom are in the audience today, such as our four regional business leaders, Adrian Gregory, Uwe Stelter, Clay Van Doren, and Yannick Tricaud, and the group's Chief Human Resources Officer, the excellent Paul Peterson. Everybody is excellent, of course.
At Atos, we have a deep bench of world-class talents, and they will be a key factor in our future success. Now, let's take a look at today's agenda. First, I will be sharing an objective diagnosis of the company's situation, including the market trends and company challenges, which led to the strategic decision to launch an in-depth study of a project, and that's the important notion today, consisting in evolving Atos into two publicly listed companies. Diane Galbe will go into the details of how we would manage and execute the contemplated separation project. Following that, Philippe Oliva, SpinCo's CEO. I reserve the actual name of that entity for later.
Philippe, then I said SpinCo's CEO, will introduce the contemplated SpinCo with the support of Rakesh Khanna and Jean-Philippe Poirault, who will provide you with in-depth overview of the new building block of Digital and BDS, respectively, as well as their updated growth acceleration strategy. That's the notion for SpinCo growth acceleration. We'll then spend time on our Tech Foundations business with Nourdine Bihmane, the CEO of Tech Foundations, will provide details on its turnaround plan. That's the second notion, the turnaround of Tech Foundations. After Tech Foundations's presentation, Stéphane Lhopiteau will discuss and present the financial details of our transformation plan, including its financing aspects. Lastly, as I said, Mr. Bertrand Meunier, our chairman, will provide the concluding remarks, and then we'll go into the Q&A session. Let's start now with the presentation.
Let's turn to the next slide. At this point, keep trying to have the teleprompter working, but it's not working. Our group is currently playing in two very distinct markets. On one side, we have the data and application-driven markets with high demand verticals such as digital transformation, cloud, of course, very importantly, and security, among others. On the other side, we have the infrastructure markets, which is undergoing profound changes driven by smart infrastructure and edge operations, which also cover sub-segments such as digital workplace and private cloud. Turning to the Slide 7, as we look at this slide, we see that these markets have fundamentally different dynamics. On the one hand, we have data and application-driven market that is worth EUR 1 trillion and is growing at a strong single-digit growth rate.
Our two business lines, digital and BDS, are well-positioned to continue capturing and harnessing this growth going forward. On the other hand, we have infrastructure-driven markets, which for the classic parts are more mature, as you know, and structurally decreasing in size, reflecting the progressive shift from traditional to next generation infrastructure. This is a key challenge for our Tech Foundations business line, which will initiate a deep turnaround plan focused on cash generation. These markets have different performance metrics and are not underpinned by the same drivers. Specifically, data and application market tends to focus on talent acquisition, capabilities building, innovation. Meanwhile, the infrastructure market is more driven by Infra Fill Rate and automation rate, fixed cost optimization, and CapEx streamlining. Therefore, the opportunities available have different dynamics as well.
In infrastructure, there is opportunity to generate cash flow with a well-managed cost structure, hence the importance of the turnaround plan to efficientize our portfolio. In digital, there is more, this is more about winning new customers, larger scope of work, which pushes the company to make the necessary growth acceleration investments. Let's take a look more precisely at these individual markets individually. Data and application-driven market size is expected to grow by 50% over the next five years, representing a CAGR between 8%-10%. This growth is supposed to last because the digitalization of the economy is a fundamental long-term trend. Let me give you a few examples to highlight this trend. In digital, IT sectors are being transformed in an unprecedented way, notably because of the public cloud and large ecosystems.
Within this context, more and more of our customers are willing to renew their digital processes with smooth integration from front to back-end to gain agility and efficiency in the way they manage their business. Digital has a real opportunity here as we are able to provide a full service from digital consulting to application development and management. As for cybersecurity, you all know it is a key priority for all of our customers in today's hyper-connected world, especially in terms of reputation, legal, and security considerations. We have a strong offering here, both with key specialists for managed services, but also with proprietary IP based on AI and machine learning. Finally, our high-performance computing offer is key to help our customers handle the fast-growing data volume, which is expected to grow by a multiple of four by 2025.
Now looking at the Tech Foundations segment, which is dominated by the core infrastructure market. This is a slightly declining market for the next years, mostly driven by an erosion in core private infrastructure due to a global shift to public cloud and hybrid cloud, which will keep on growing. Therefore, it is key to have an adequate cost base with a comprehensive pricing, with a competitive, I should say, pricing for our customers. While there is slight decline in the infra market, there is a solid demand for higher margin activities such as consulting, implementation, managed services, and for the digital workplace, which shows that there is room for a strong, profitable business in that segment.
In addition, high-end infrastructure remains key in the mid-term for potential developments, notably of the metaverse and other hybrid services combining public and private infrastructures. In these two markets, Atos is competing against few playing competitors. Given the increasing complexity of technology, our competitors tend to specialize themselves in three or four fields maximum, rather than the whole spectrum of offers like Atos currently does. This gives an edge to our competitors as they have much more agility and a better flexibility and a greater focus. Digital and BDS are managed or supposed to be managed the same way as Tech Foundations. They don't have the same recruitments, the same cost management, they don't have the same business trajectory or growth trajectory, and they don't have the same value creation levers.
In fact, in today's ecosystems, we remain one of the few players operating the entire technology stack, having exposure from data center outsourcing to high performance computing and cybersecurity, which means less focus and probably less performance for us. When I joined, I made a full and deep diagnosis of our performance, interviewing 100 salespersons and CEOs, delivery responsibles, our top customers, and analyzed inside out all of our performance metrics. We have to be humble and acknowledge that through our diagnosis, we have identified a number of structural and cyclical issues that have been impacting Atos' performance in the past years. Pinpointing these issues is key, evidently, to the success of our contemplated transformation plan, as it allows us to establish a strong base of understanding and tailor initiatives to address them.
Our Tech Foundations division had to face many issues, some of them cyclical, such as inflation, some of them more structural, which we intend to address with our turnaround program. Indeed, we are confronted to sales defocus, a lower productivity and utilization rate compared to our peers, and a significant number of loss-making contracts. Red contracts, as we call in the industry. Our delivery costs have also been impacted historically by a higher exposure to high-cost countries, and also higher resort to subcontractors. Two key factors which, in which there is a very significant area for improvement and potential, significant potential to catch up with, competitors' performance level. Our BDS division margin was also under pressure due to talent war, and also, very importantly, we come back to that later, the component shortage which affected our HPC business.
In our digital division, both the inflation and the talent war have impacted our business margins, but we're also lagging behind our competitors with regards to Syntel integration. All of that, combined with our lower productivity for commercial resources and exposure to high-cost countries for labor, led us to underperform the market, which is positively a lot of potential for us. We are currently working hard on redefining our workforce structure to remedy this drag on our margin. Our business line leaders will come back in detail on all the actions we are undertaking to remedy that underperformance and bring back Atos more in line with market standards. That's one of the key underpinning factors of our acceleration and turnaround programs.
As implicit in our 2022 guidance, our transformation has only started and has yet to get momentum, which is why the group performance in 2022 remains somewhat muted. As I already mentioned earlier, Atos' transformation began sooner in the year when I announced a new simplified governance structure in order to better address a rapidly changing market, optimize operational performance, and importantly, stabilize the commercial momentum of the company. As announced in February 2022, our new governance is structured around three main business lines, and also four regional business units which are in charge of the commercial momentum of the group. I'm describing the three business lines. We start with Tech Foundations, which does bundle Atos asset-intensive activities and regroups activities reaching maturity, such as data center and hosting, digital workplace, as well as business process outsourcing, mostly in the UK.
Digital is a skill-and-capabilities-driven service business, and serves Atos customers in digital, cloud, and decarbonization. Big data and security, also called BDS, is a high-growth, R&D-intensive business, and focuses on digital security and advanced computing. We have four regional business units which, as I said, have the full ownership of accounts and commercial momentum. While this initiative, this reorganization, this new governance was recently implemented, we are seeing already early improvements in the commercial traction of the group, which is a positive sign for the rest of the contemplated next steps of our transformation journey. In that context, and following an initial comprehensive diagnosis of the business, it became strategically clear to our board of directors that the best path forward for value creation would be to have two independent leading players. One focused on data and application-driven markets, and another champion of the infra sector.
SpinCo would be a leader in digital transformation and would regroup BDS and digital activities. That business generated EUR 4.9 billion in revenues in 2021, had a 7.8% operating margin, and a 5% revenue growth that same year. SpinCo management would harness solid underlying market trends and focus on generating stronger top-line growth and achieving double-digit margin down the road. On the other side, TFCo, Tech Foundations Co, would be a global leading tech-agnostic full service system integrator and managed service provider. TFCo would encompass Tech Foundations activities, which generated in 2021 EUR 5.4 billion in revenue at a slight negative margin and a -12% revenue decrease.
TFCo management would be focused on bringing the business back to profitability, given operating margin was negative in 2021, as I said, and focused on generating positive cash flow through a turnaround program. Moving forward as two standalone companies, it is currently envisaged that SpinCo would be named Eviden, while Tech Foundations would retain the Atos brand name. We have Atos, Tech Foundations, and Eviden SpinCo. Looking at the rationale, the contemplated spin-off under study would create two distinct companies, each with an intensified focus on their own strategy and markets, with a dedicated world-class management team and the ability to execute their own strategic roadmap. In addition, each company would have adequate capital structure, we would come to that later with Stéphane Lhopiteau, adapted to its financial profile, providing them the financial flexibility to achieve their own goals.
Another key reason is that by listing SpinCo, Eviden, we would unlock its value potential given its exposure to high-growth and high-margin markets, as we believe that the value potential of this asset is not reflected in today's Atos share price. Finally, our transformation plan would enable TFCo to effectively restructure itself to generate significant and growing cash flows from 2026 onwards. Above all, the contemplated spin-off should maximize value for all Atos stakeholders. If we move forward with this project, the two newly formed companies, Atos and Eviden, would have markedly distinct long-term strategies. Eviden would position itself as a digital and tech leader, a talent hotspot that could leverage its strengths to gain market share in Europe with sovereignty and in the U.S. with the applications, digital and cloud.
Its portfolio would be reshaped to capture market growth momentum and premium pricing with more focus, and it's a very important notion, on cloud. SpinCo would also develop strategic partnerships with hyperscalers and leading software vendors to implement its solution at scale and lead large digital transformations. Synergies, and that's a notion also I'd like to insist on, synergies between BDS and digital will be maximized to strengthen the growth of Eviden. On the other hand, TFCo would implement a turnaround plan of its delivery cost mostly, and of its operations to unlock its value potential and come back to positive cash flow generation. As a standalone company, TFCo would position itself as a leader in digital workplace, hybrid, multi, and next-generation cloud services, capitalizing on growing demand for high-end IT infrastructure.
Importantly, TFCo would drive further value creation by growing its footprint in sensitive, critical industries and applications, and is exercising its pricing power in shrinking competitive intensity. In the longer term, it could participate in the industry's consolidation. If we move forward on the project and to successfully implement and execute the transformation and position the two companies for success, we are considering investing EUR 1.5 billion over the period 2022-2026. Out of those EUR 1.5 billion, EUR 400 million would be earmarked to accelerate SpinCo's performance, accelerate SpinCo's growth, particularly boost its commercial performance, grow and adapt and reskill talent pool, and drive focused R&D and developed capabilities in new leading technologies.
The remainder EUR 1.1 billion would be invested in the turnaround plan of TFCo Atos in order to reset the cost structure, rationalize the portfolio, stabilize revenue, and pivot to growth. We will dive deeper into these initiatives later in the presentation with Philippe Oliva and Nourdine Bihmane. This EUR 1.5 billion investment required over the next five years would be financed by the group P&L for a third, and from new financing brought by the monetization of SpinCo shares for two-thirds. To lead the contemplated transformation of both SpinCo and TFCo, we will be leveraging Atos' deep pool of leadership team, which is, as I said in my introduction, world-class and highly experienced. For SpinCo, it will be led by Mr. Philippe Oliva, who is Atos current Chief Commercial Officer.
He will be working alongside three highly skilled executives, who are in the room with us today. I'm quoting Anil Agrawal, previously CFO of Syntel, including when it was a listed company at the U.S. Stock Exchange, who serves as the CFO of Eviden. Jean-Philippe Poirault will lead the BDS part, and Rakesh Khanna, who of course, will brilliantly lead the digital part of Eviden. At TFCo, the company would be led by Mr. Nourdine Bihmane, and he would be supported by Darren Pilcher as CFO and Laurent Barbet as COO, two seasoned and highly talented executives with relevant experience in tech and specifically also infrastructure. Collectively, they have the skills and experience to lead both companies to the success.
As I said, this is an ambitious transformation plan, one that would enable to deliver strong performance improvements in the medium term and to catch up with the performance level of our peers. Looking at SpinCo, acceleration of growth as it is expected to generate 7% annual organic growth per year on average between 2022 and 2026, with an acceleration throughout the period to reach EUR 7 billion in revenue in 2026. Acceleration in profitability also for SpinCo as its operating margin would steadily improve from 7.8% in 2021 to 12% in 2026 as we deliver on our plans. Lastly, an acceleration in cash generation as the free cash flow before interest would reach EUR 700 million in 2026, representing a cash conversion of 75%-80%. The key metrics for TFCo now.
After a period of managed decline and portfolio reset, and an injection of EUR 1.1 billion in the restructuring program, revenues would stabilize in 2025 and pivot to growth in 2026. As we deliver our plan, TFCo's profitability would turn positive in 2025 and reach over 5% in 2026. Lastly, and more importantly, because it will be the focus of TFCo strategy, TFCo would renew with positive free cash flow generation in 2026 with an expected EUR 150 million of positive cash flow that year, and will keep improving thereafter in the order of EUR 50 million annually. My colleagues will present to you in detail how we intend to achieve these objectives.
As a starting point into this transformation journey, our FY 22 current trading is robust, despite the many headwinds that the group is still facing today. Revenue trends are robust and fully in line with our guidance. Operating margin is in line too, and as expected, remains under pressure due to inflation in salary costs. Current trends in that metric are actually pointing towards the lower half of the guidance range. Free cash flow trends are robust and fully in line too. For the contemplated transformation plan, we set as an objective to divest around EUR 700 million worth of non-core assets. With already substantial proactive interest from the marketplace. Those EUR 700 million will be utilized to provide funding to our ambitious transformation plan. Now it's time for me to turn it over to Mrs.
Diane Galbe, she can go into the details of the execution of the potential separation process. As a way of introduction, I should say that Diane will be in charge of leading the carve-out operations, as she has a very solid track record and a unique experience in that domain that she gained at, notably at Suez. Thank you, Diane.
Thank you, Rodolphe. Hello, everyone. I joined Atos just three months ago as Chief Strategy and Sustainability Officer and General Secretary. In my last position, I was Senior Exec VP of Suez, in charge of strategy and transformation, and CEO of Smart & Environmental Solutions, in particular, IoT and software businesses, as well as sustainable consulting. I'm very proud to have joined a group with such strategic assets and talented people, and at a time when we are setting up a strong transformation plan to face our challenges. In this section, I will share with you our perspective on how we are going to manage and execute our strategy for the next 12-18 months ahead of the spin-off execution.
Starting today, we are organizing ourselves with strong targets and dedicated teams, both to deliver immediately on our transformation and to prepare for the spin-off as early as possible in H2 2023. On transformation. For SpinCo and Tech Foundations, this means two dedicated strategy roadmaps. Specifically, SpinCo will have an acceleration plan and be focused on boosting sales and performance through strategic initiatives that Philippe will present you with Rakesh and Jean-Philippe. Tech Foundations will initiate a strong turnaround plan to restore margin and cash generation that Nourdine will present today. In parallel to the immediate implementation of these roadmaps, we will execute swiftly the carve-outs process if decided, and maintain for the group overall focus on sales motion, day-to-day operations, talent retention, short-term performance, and cash generation during the transition period.
For this intended spin-off, we have a clear roadmap to ensure we protect and capture value. We have identified three operational areas that are key to the success of this process and that will strongly position both future companies. Starting with customer engagement, a key element of our strategy for which we have a new management governance in sales and delivery that is already in place and deployed as of today. Dedicated sales incentive in place for the transition period, and we will ensure that the carve-out process is conducted in such a way that it will be a smooth transition for our customers. With talent retention, which is a main asset and driver of Atos, as Rodolphe mentioned, we intend to keep it that way by providing visibility on the future organization, job perspective, while we are protecting benefits.
Allocating teams based on capabilities and future needs, having a close alignment with our social partners, and installing dedicated change management program. As for supplier and operations continuity, we will be focused on putting in place comprehensive strategic agreements between the two entities, negotiating with third parties to minimize dyssynergies, and having in place contractual services support during the transition period. Finally, we will set up a transformation management office with responsibility for the master planning, ensuring a swift cadence in the overall process and mitigation of one-off stand-up costs. Looking now at the calendar. Our plan to split into two entities is expected to culminate with the listing and distribution of SpinCo shares in the second half of 2023. We will set up incentives to deliver this transaction in the earliest part of the second semester of next year.
Through this contemplated project, we will distribute approximately 70% of SpinCo shares to Atos shareholders, with the remaining stake to be monetized over time by TFCo in order to finance its transformation costs. In addition, minimizing the tax impact for shareholders will be a key element taken into account in the detailed analysis of the contemplated transaction. Our first milestone in our timeline is in the next few months as we aim to finalize the structuring work we have been doing around tax, legal, and operations, and then we will be executing the carve-out process from Q4 2022 to H2 2023. The spin-off would be, of course, subject to customary conditions such as employee consultation process, governance bodies, and shareholders approval, which will happen at an ordinary general meeting in Q2 or Q3 2023.
Once the spin-off transaction is completed, both TFCo and SpinCo will be separately listed. As we move forward, we will be focused on properly executing the spin-off and driving the business. To achieve this, we will have a dedicated management team that will work hand in hand to oversee the execution of the transaction while delivering the performance and transformation of both SpinCo and TFCo. Importantly, throughout this process, we will be committed on transparency with regular updates to the market and being results-driven. This is a new chapter that is starting today for Atos, and I look forward to supporting the two new entities position themselves for success while we continue driving the group forward. With that, I now turn it over to Philippe, who will present SpinCo.
Good morning. Thanks for welcoming me, and I'm welcoming you. I just wanted to introduce myself rapidly. I'm Philippe. I joined Atos in April 2022. I was previously a Chief Commercial Officer of Syntel, and I spent 20 years in the IT industry, mainly working at IBM, and had also some entrepreneurial experience around cloud and artificial intelligence in the past. In addition, what I wanted to highlight is that I'm really honored to lead the acceleration plan. If you can move forward, or otherwise I will figure it out. Now if we look at this acceleration plan, basically what we're trying to achieve is really training a champion.
When you look at how SpinCo and Eviden would be positioned on the market. Basically, if we represent EUR 4.9 billion revenue, generating, let's say, 5% organic revenue growth in 2021, and they're providing, let's say, 7.8% operating margin, and everything is delivered by 59,000 employees, and we are operating in more than 70 countries. If we look at the core capabilities, through BDS, Eviden would be the number one worldwide in the managed security services, top 3 worldwide in supercomputing and advanced computing, leader in data and analytics and cloud enterprise solution. I will come back later on what we're trying to achieve on the cloud part. Top 10 around what we are calling smart platform, and especially on SAP application.
If you can go to the next slide. Thank you. When we look for the revenue breakdown, digital activities will represent EUR 3.5 billion of revenue, 50,000 employees, structured around three business lines, digital transformation on one hand. What we're calling smart platforms, and that is mainly around, let's say, applications like SAP, ServiceNow, Salesforce, and Microsoft Dynamics as an example. The cloud business on the other side, one of the pillars based on the public cloud transformation and leveraging our core capabilities that are coming, let's say, from our cybersecurity knowledge. On the other side, we have BDS, mainly structured around two activities. Digital security with our number one, let's say, worldwide managed security services capabilities and advanced computing.
Where on the advanced computing side, keep in mind that we have, let's say, two distinct organization, one that is handling, let's say, high-performance computing and the other side that is on edge, and AI infrastructure to support the digital transformation of our clients. The next slide, Thomas. Thanks. And it's not because we want to be really, really proud of, let's say, what the market is saying about us. Basically, when you look at the key elements, and component and the way the markets, and analysts are looking at us, from an operational point of view, we've been considered, as, let's say, a visionary public cloud by Gartner in 2022. And that's really part of the added value of combining both digital and security capabilities.
It's also to enter into a much more secure cloud process for our clients and embracing, let's say, brand new digital transformation. On the other side, we have been considered as leader in data analytics and same thing. What matters is that that's the combination of both our edge computing capabilities, building up, let's say, on top of our digital transformational assets that we have, especially on the application layer, that will deliver the transformational journey that we're expecting. Now, if I'm digging into the digital and cybersecurity world, so on. We can be quite proud of, let's say, the ranking, because being number one in managed security services is quite an achievement from the team. It's quite recent because it has been announced by Gartner in 2022.
Number three in worldwide supercomputing and something Jean-Philippe will detail, let's say, what is running underneath, let's say, the supercomputing capabilities. Leader of leaders by ISG in Edge and AI. That's really something that is very important related to the core evolution of the application deployment and infrastructure requirement of our clients. Now Rodolphe mentioned, let's say, synergies that we will articulate in the plan. Basically, what we're gonna structure is to ensure commercial efficiency between BDS and digital, mainly around our security go-to-market model and the application layer. Everything is gonna be structured around, let's say, a dedicated go-to-market by industry. Why by industry? It's not that we're getting back to the SPRING program.
It's just because we're structuring the proper and articulating the right value proposition for our clients. We must make sure that we have deep industry expertise, deep industry knowledge, and that we're translating this expertise into ring-fence operation, but also capitalizing on the key strengths that we have, especially in terms of offering development. This will generate, let's say, some revitalization opportunity. I can take a very pure example and that is based, let's say, on an announcement that we made last week. I don't know if you captured that, but basically, we announced that we will partner with IBM in building up, let's say, secure cloud capabilities.
That's really the perfect illustration of, let's say, building up on top of public cloud layers, and leveraging our core assets around managed security services to ensure that financial institutions, as an example, will be able to embrace their digital transformation in a much more secure regulatory and compliant environment. All in all, Thomas, if you can move to the next slide. If we look at the market trends on those two key activities, what matters is that first we are operating on the market that is really growing, and especially to the two area domains that are growing double digits. Digital transformation, the market is expected to grow between 2021 and 2026, between 10%-11%. Application domain, 5%-6%.
Public cloud and hybrid, 10%-12%, and advanced computing, 12%-14%, and digital security, 7%-8%. What matters is that this is not the addressable market, especially on advanced computing, that we're gonna go after. Jean-Philippe is gonna detail, but basically, when we are breaking down, especially on our BDS capability, HPC and edge computing, HPC is expected to grow over the period by 5.8%, and edge computing and advanced computing by 10.8%, and digital security with our addressable capability will remain in the same ballpark than the 7%-8% that we are mentioning. Jean-Philippe will go into the details.
What we wanna do is also capitalizing on the, as I said, on our core application portfolio. When we look at what we are doing on the, let's say, our key activities on the digital space, we created some great discovery tool sets to help our clients, let's say, starting to engage on a brand-new model for application transformation. We all know that, let's say, the shift to the cloud and the migration strategy is mainly driven by our ability to understand how to help our clients shifting from the legacy application to the next generation of transformation.
I'm quite proud, and that was a great discovery on my side, because that's something I've been struggling with, let's say, over the past 20 years, is to make sure that we can have, let's say, an appropriate environment where we can really commit based on the artificial intelligence capabilities on building up the right transformational path for our clients and helping them shifting, as I said, from legacy application to the new modern world that is mainly based in public cloud, as you know. What is also important that I wanted to highlight on this slide is that there's something that we're not talking a lot about in the IT industry. It's the massive server inefficiencies.
When it's all about, let's say, structuring our commitments around, let's say, our environmental commitment and journey, that's gonna be part also of what we're gonna deliver to our clients and where we want to be drastically good with tangible outcomes in our delivery roadmap. Because the reality when you look at those three main actions that we have on this slide, first, with the new capabilities and product that we created with Exascale, it's the most powerful HPC, but it's also the greenest one. We have, let's say, a net zero strategy and implementation advisory services that is quite successful and that clients are really also expecting us to continue to operationalize their digitalization and transformational journey, as I said, to tackle that massive server inefficiency that we have in, especially in, the legacy environment.
We have a strong commitment in the Decarbonization Level Agreement with 10%-15% CO2 footprint reduction commitment for our roadmap. It's not because we want it to be nice. It's really at the core value of the organization. That's also what I'm seeing, let's say, part of the heart of our employees and their day-to-day commitment to sustainability or environmental optimization. That matters a lot.
I do believe when Rodolphe was mentioning, let's say, about, let's say, being a hotspot for talent, that's, when we look at what's going on with the next generation, that's also something that, should help us out in, showing, let's say, not only the technical part and the great innovation that we have, but also, the great commitment to, footprint reduction of CO2. Now, if we look at the medium-term objectives, Rodolphe highlighted, let's say, the acceleration plan that we have. Basically shifting from EUR 4.9 billion in 2021, to EUR 7 billion. That represents 7% CAGR over the period 2022 to 2026.
Based on our expectation for revenue in FY 22 at EUR 5.3 billion. Operating margin with a significant improvement, 7.8%- 12%. Free cash flow, same thing with a significant improvement with EUR 150 million at 30% conversion, up to EUR 700 million, 75%-80% conversion. What you can also consider from this, let's say, operational commitment and acceleration plan is that we would commit to keep our leverage below 3 x OMDA as of 2024. Moving forward as a standalone company. First, it's a great honor and a great pleasure to, if Atos is moving forward with the project, to lead the company.
It's even more a great pleasure to be surrounded by terrific talents. We normally call them IT industry veterans, but I prefer to use, let's say, great leaders. I will be, let's say, very pleased to embrace that acceleration plan and that transformation journey of SpinCo with Rakesh that Rodolphe already introduced. 35 years of experience in the digital industry joined Atos as the CEO of Syntel in October 2028. I'm not gonna go through the bio and all that, but Rakesh, we come here.
I'm really, really proud to having him in the team and helping me out in getting, let's say, the acceleration plan perfectly executed with the right level of commitment on both operationalization, but also delivering, let's say, the financial figures that we discussed today. On the other side, another great leader, Jean-Philippe Poirault, 30 years of experience. I look too young when I'm saying that, which is great. Joined Atos as CEO of Southern Europe, and had terrific experience also, being the leader for AWS for the telco and media industry. Our SVP, Head of IT and Cloud Business at Ericsson, and with a great track record in the industry. Also an amazing COO.
I think John is also in the room, for the same thing, 30 years experience. That's gonna matter a lot, let's say, to get that kind of operationalization background, and great understanding of the digital transformation model. John, same thing, is gonna be part of the key leaders of the team. Cyril Dujardin, that is also in the room, 20 years of experience. He joined Atos as their head of mission critical, and that's also a very important point for us. You know that we are really well positioned to help, let's say, the different MOD in embracing also their digital transformation. I'm really counting on Cyril to continue to expand, let's say, our capability on that front. Now, I'm done with my presentation, so thanks for your attention.
I have the pleasure to turn it over to Rakesh. Rakesh, thank you. Good morning, folks. I'm Rakesh Khanna. A pleasure to be here in front of you today and a big honor. Welcome to my session. Next month in July, I complete 17 years with Atos. Very proud about that fact. Like Philippe mentioned, before Atos, I was the CEO for Atos Syntel for a very long time. I'm very proud to lead my 51,000 employees into a very bright future in the digital world. Let me start by sharing something which happened at home recently. As I was coming to Paris, my teenage son, he happened to ask me, "Dad, do you know who's the world's best chess player?" Now, when I was growing up, I remember it used to be the Russians.
I told him, "Son, it must be Garry Kasparov." He says, "Dad, you're dead wrong. The world's best chess player is not Garry Kasparov. It's a computer called Deep Blue. And you run such a large IT company, how come you don't know this?" I happened to tell him, "No, no, I actually know the answer. I was just checking if you knew the answer." Kids being kids, you know, they take me at face value, and we moved on. This is a great example of a digital native, my son, a teenage kid.
Aware of what's going on and pointing out the fact that some of the most complex tasks in the world are no longer done by human beings, they're done by machines. This is the impact digital is creating all around us, not only in our family, in our homes, but more importantly, impacting our customers and their businesses. In fact, I was in the U.S., and one of our Fortune 100 CIO is a good friend, an old associate. He was telling me, the CIO of this large Fortune 100 multinational, "Rakesh, the digital movement feels like a bullet train, the Shinkansen, or in this part of the world, more relevant, the TGV, going at very fast speed.
We want you guys, partners like you, Atos, to be our partners laying the tracks half a mile ahead, making sure that my bullet train doesn't go off the cliff. That's really what I believe is our responsibility as a partner to our customers, to make sure we are supporting them, moving at speed, anticipating the change, and helping them navigate this digital journey. With this introduction, I want to spend the next 20-25 minutes walking you through a deep dive on the digital business that is part of our Atos portfolio. It's a robust business, EUR 3.5 billion of revenue, 51,000 people in my team, three global delivery centers, and 13 local delivery centers. We delivered last year 6% organic growth in the top line and high single-digit operating margin.
If you look at the three broad services in my, i n our area, the first one is transformation, 11% of the top line. Cloud is smaller, 13%, but one of the fastest growing businesses, and I'll come to this in a minute. The rest is really application, what I call smart platforms and smart applications. It's a very balanced geographic mix of revenue. America is by far the largest for us. 32% of our top line comes from the US. The remaining three Europes, Northern, Southern, and Central Europe, is roughly 22% each. It's a very, very diversified geographic mix of the business. Now, we are very proud of what the world analysts are saying about us, the influencers. If you see what Gartner says, although it's a small and fast-growing business in our group, the cloud business, they already recognize us as a visionary in public cloud.
Very strong accolade, and we are very proud of this. They also see us as a leader in data and analytics. If you look at what ISG says, a leader in mainframe services, and I'll later talk to you about our mainframe services, migrating mainframe to cloud. They also recognize us as a leader in digital business solutions and services powered by automation. Everest recognizes our achievements in sustainability and also a leader in ServiceNow. This is fast becoming the platform of platforms, okay, if you follow ServiceNow, but again, I'll come back to that in a few minutes. We are very proud of some of these very sharp accolades that you know the influencers are talking about us. Now, we really believe we are powering digital experiences for our customers and helping clients evolve to virtual enterprises with physical presence.
Now, earlier, when a bank would launch a mobile service, that would come in the news. Today, it's the other way around. An online grocery store opening a physical shop is coming in the news. We have customers ranging from a digital native or a born digital company to some of these Fortune 100 and Global 2000 corporations who are trying to undergo this digital journey. That is where we have an end-to-end service portfolio, starting with what we call transformation. This is a small group of 2,500 high-end consultants in our team working on business transformation for clients, data and analytics, IoT, Internet of Things, and customer experience. Not to forget net zero transformation. Again, this has really leapfrogged us helping clients move to more sustainability using our deep climate knowledge, using our CO2Compass calculator in EcoAct.
I'll come to the acquisitions we've done in the past, how we are leveraging some of our strengths to deepen our expertise in sustainability, and this is a big agenda item on many of our large customers that we see. The second area is smart platforms. Now, this is really when I talk to my developers, to my 50,000 people globally, programmers or architects, I always tell them we've got to think AI first, okay? How can we build AI and machine learning into every single line of code? The customer may not be demanding it today, but it's our job to think proactively and start bringing in machine learning in every single piece of code that we write for our clients globally.
Now, in smart platforms, again, we have areas of expertise around, of course, application services, digital services, digital integration, you know, application modernization and some of the fast-growing areas in ServiceNow, Salesforce, SAP to S/4HANA, Microsoft. This is really another very strong area. Bulk of the revenues come from this right now, but this is a very significant piece of the business that we deliver to customers. The last area is One Cloud. Cloud is the core of our strategy for the future. This is really the public cloud revenues that we track. Like I said, it's 13% growing fast, and we have about 10,000 people in this group, and I call them cloud ninjas, delivering cloud advisory services, cloud design and build services, and cloud ops managed services. Okay?
This is a very significant area working with the hyperscalers, predominantly AWS, Azure and Google. This is the area that we are investing in and also reskilling our workforce to deal with the upcoming changes that are constantly coming up. Now, this is a very good slide showing some of our selected customers. Again, you can see the breadth and depth of the clients that we do business with in the application space, in the digital areas. Here, what we've done, we've had some fantastic delivery models working for these clients. For example, what we did for a large healthcare insurance company, moving them to Azure DevOps and Salesforce cloud. Okay. Developing a digital twin for a large energy company.
If you look at the connected car, what we are also doing for some large automotive manufacturers. Okay, the Industry 4.0, moving to a smart factory, integration of ops and ERP. Also on the energy conservation, right? I talked about the sustainability. What we are doing is, in fact, we have taken these excellent projects, learning from this, developing deep domain expertise, and then scaling it and industrializing the delivery to take it to our large customers. Now, connected car is a great example. A couple of years back, we signed a connected car deal with a truck company in the Netherlands. That's how we started with the expertise. On back of this, we were able to win one of the largest car companies in the world to do a connected car implementation for this player.
Last month, we signed a large German automotive major, where we are now rolling out the connected car. This is a good example of taking a service offering, scaling it and industrializing it to take it to the next level. Similarly, we have smart appliances, Industry 4.0, S/4HANA migrations, mainframe to cloud. A lot of these, you know, services which we believe are extremely strong entry point to take it systematically to our large customers and be able to fertilize, cross-sell and upsell. One of the things we may not have done such a great job, but we are fixing this pronto, is the area of improving the depth and width of our relationships with partners. If you look at the left-hand side, clearly we are putting a strong program.
In fact, we are already in flight, where we are working with some of the fastest-growing high-tech emerging players in the world. If you look at ServiceNow, Salesforce, okay, AWS, Google, Azure, Snowflake. These are the upcoming technologies of tomorrow, which are really going to drive customer spend in this area. We are also doing extremely symbiotic relationships, very strategic partnerships with these players to go back to customers together. Definitely an under-leveraged lever, I would say, which we are harnessing now going forward. Another thing which is driving this positive momentum is the acquisition, what we've done. If you look at Cloudreach, AWS applauds us for buying Cloudreach. Although it's a small company that we bought. They are premium in AWS.
In fact, they have an IT called Cloudamize, which AWS is now using to take to their customers to migrate workloads to AWS, to the cloud. Okay? Very strong impression. If you look at Maven Wave, this is the top ten Google partner in the world, and this improves our positioning with Google. Similarly, Edifixio, very strong Salesforce and AWS company, okay? These are the only two things that they do. We had bought this company. We are in the process of integrating and using a lot of this talent and the connections back into the partnership to strengthen our partnership. Eagle Creek, Salesforce-only company. With Eagle Creek, we were good in Salesforce. If you look at what we used to do with Lightning, very strong practice.
Once we bought Salesforce. Once we bought Eagle Creek, we brought in a lot of expertise on Lightning, the AI cloud model. Tremendous, I would say, leapfrogging, helping us catapult inside these partnerships to take it forward. IDEAL GRP, again, an acquisition which is really around Teamcenter. Processia, a very strong company we bought around Dassault Systèmes. EcoAct is more on sustainability. Again, using the acquisition and the partnerships to drive a virtuous cycle of growth is another strong momentum that we have started, and this is again going to help us reach our growth ambition. Now, the left-hand side graph shows the way the market is growing, okay? If you look at the bubble on the leftmost side of the quadrant, the bottom left, that really represents some of the players in transition which have a large infra business.
The middle bubble is a representation of global players with some local presence, and the top bubble is the global A-tier Indian majors and digital pure play, I would say, companies out there. The green dot represents where we are today. The landing white dot is really where we aspire to be. Again, there have been barriers in the past. Rodolphe alluded to some of them. Clearly, we have recognized what we need to do better as a company to execute and take it to the next level. For example, if you look at the growth, again, the new identity is definitely going to help the positioning. A simplified governance to address fragmented ownership, a combination of very sharp focus, scaling, and industrializing is really going to help us grow the top line.
On the profitability, again, there are details, and the next three slides, I'm going to walk you through the operating plan on how we are going to help take it, both in terms of the growth as well as in terms of the margin. Okay? This is really what I talked about in the ER on the revenue side. How are we going to take it forward? Focus on clients, for sure. Focus on sales, okay? Recalibrating our accounts and sales teams to sell digital services. This has been a gap.
We've not done such a great job, but again, fixing it systematically across our top customers, making sure we got right feet on the street to walk the corridors in the large customers with the right knowledge to pitch to the CIO and the business, because that's where the decisions for digital projects or funding are being taken, not in the IT room anymore. It's really a very strong input at a different level. Hiring and supplementing via digital specialists to shape transformation deals and aligning sales incentives. Of course, we are going to invest EUR 70 million over the next five years OpEx to make sure we invest in growth. We do believe this is over and above what we are already doing. This is not just the only amount, but definitely we are already invested, and we're going to invest more.
If you look at some of the key actions which will drive the revenue top-line growth, okay? The first one I talked about partners, then the acquisitions. Leveraging this channel, which is slightly under leveraged right now. Working with the cloud hyperscalers to drive the growth. Working on new logos, okay? Driving new revenues are very, very important, and that's linking it back to the investment that we need to do in the sales model. Working in our top 25 accounts, going very systematically. I gave you the example of connected car. Taking each of these very sharp offerings back to the relevant customer set very systematically and pitching for the large deals, large funding in the existing accounts. Then, of course, taking the top talent reskilling, okay? In the cloud, making sure. Today, we have 10,000 people certified in public cloud.
End of this year, we have a goal to take it to 20,000, and then so on and so forth, because that's really what we see as the future. Investing in reskilling, in industrializing the workforce also is going to be a key component for us to drive margin. Another important thing is simplifying our portfolio. I talked about my son. Another example of a simplified story I want to share with you. My son happened to ask me, "Dad, what's the difference between data and information?" So I have an engineering background, and I started telling him, "Look, son, there is a third normal form, and you've got to optimize data, and there is high online in-memory database, data stacks, Snowflake." He says, "Dad, stop.
Why do you guys in IT complicate things so much in technology?" So I said, "Okay, simplify it for me." He says, "There are 20,000 species of snakes in the world, is data. The one under your chair is poisonous, is information." Really we have to probably learn from the digital natives on how do we simplify our businesses. This is a great learning. Obviously, we need to, you know, take it to a next level. I do want to share with you that simplified portfolio is extremely important for us, for the rookie on the floor. A programmer on the floor should be able to understand what the business driver is and be able to co-communicate back to the customer, understand and anticipate, and then solve the client problems using the power of technology.
A lot of these things are in motion, which we believe are really going to help us drive even better execution going forward. In terms of the margin levers, clearly using AI first, using automation as a big-ticket item to improve productivity. This is definitely a very critical delivery transformation that is already underway, and we need to do more. Recognizing and putting an entire program around this is what we started, and that's really what we will execute. Similarly, reskilling of our delivery teams, right? I talked about cloud, AI, making sure they are thinking cutting edge. Transforming and restructuring, of course, you know, we're looking at a EUR 300 million spend again over the next five years to make sure we have the right talent mix in the company to be able to navigate this journey which is ahead of us.
Again, lot of actions on, you know, which we know, delivery productivity, having an impact on the margin, right shoring, reducing subcontractor usage, balancing our talent pyramid, and of course, driving higher margin on new business. Now again, this looks like motherhood and apple pie, and this is not rocket science, but the devil is in the detail. How do we implement? Again, I'm proud of my Syntel heritage, where you may remember as a listed company, we used to deliver industry-leading margins. And a lot of that knowledge, and experience of the team, we are going to bring to bear to really get to some of these operating levers to get it to the next level. Finally, lot of detail.
Again, we have dashboards where, you know, again, we know what the industry is benchmarking, but we want to take a reasonable, achievable goal in terms of our improvements in utilization, labor mix, subcontractor usage. Again, if you double-click, there are multiple things which we track, but this is. I know this is a bit tactical, but this is really to show that we have a very strong operating plan behind this, which we will use, and we are continuing to use to deliver. To summarize, it's a really great opportunity. Very exciting. Cloud is a core part of our future growth. Establishing a strong digital transformation partner for our customers, capturing the revenue and margin potential. It's a buoyant market. We see headroom to grow. We see the spend is definitely continuing to grow. This is not going to slow down sometime soon.
Being a partner of choice to our customers and leveraging partnerships, a clear, realistic acceleration plan. That's what we believe. We have a well-defined, structured, achievable plan to deliver profitable growth through our focus on customer and also sales focus and improved delivery model transformation. I'll end with a quote by Sun Tzu. If you have heard of this fourth century B.C. warrior, right? One of the most successful warrior, he says, "Strategy without tactics is the slowest route to victory. And tactics without strategy is the noise before defeat." I'm happy to share with you we have a very good combination of strategy and tactics, a very strong execution plan. Like I say in my internal town halls when I talk to people, strategy is admired, execution is worshipped. We believe in executing very well and really taking it forward.
Thank you very much for your attention. I have the honor to call my very talented friend and colleague, Jean-Philippe, who's going to lead BDS, and we welcome Jean-Philippe to stay. Thank you very much.
Thank you, Rakesh. It's a pleasure to be your partner in this new adventure of Eviden. Good morning to all. Very pleased to be with you today, and thank you for being with us in this new adventure of Atos and BDS. I'm Jean-Philippe Poirault, the new head of Big Data and Security. I joined Atos two years ago, coming from Amazon AWS in Seattle, where I led and created the telecom business unit. Let me start by giving you a snapshot of what Big Data and Security is. First of all, we define ourselves as a trusted data intelligence partner. This is important, combining compute, artificial intelligence, machine learning and cybersecurity solutions to better serve the digital economy.
What is important in this new digital economy, this is all about securing data and processing the data at the right location. I will come back to that because this is important to understand. Our business is divided in two parts, digital security, 51%, and advanced computing, 49%. In the digital industry space, there will be basically four locations where you can process the data. Number one, the public cloud. Number two, private data center or private cloud. At the two extremities of the computational spectrum, you have the high-performance computing, and at the opposite side you have the edge computing, which will accelerate as 5G will take off. Within our advanced computing business, BDS is clearly positioned as a two extremities, so with the high-performance computing and with the edge computing.
We also offer the tools and software to bridge from the two extremities to the public cloud, same with the acquisition we did last year with Cloudreach. Within the digital security, we offer services and products across all segments, which are increasingly growing in terms of demand due to security and sovereignty protection demand. Over the last four years, we have been able to grow our international presence in all geographies, especially in Europe, in the Americas and in India. Overall, as one unit, we are composed of 9,000 engineering experts that have developed 1,800 live patents, and we have generated EUR 1 billion in revenue. Given our craft, we are highly committed to innovation, and we are doing a lot of R&D, which represents 8% of our total revenue.
BDS posted mid-single digit operating margin in 2021, mainly driven by the non-recurring impact of component shortage in advanced computing, as well as the acceleration of the transformation of our portfolio towards high-end, high-performance computing and edge computing. The digital security business delivered high single digit operating margin, and we expect overall low double-digit operating margin for BDS as a whole by 2026. Now let me turn to the next slide, which is going to give you a look at our industry, especially business, and about what is going on in the world digital economy. The data, they are at the heart of the digital economy, and you know that very well. More and more business are now data-centric, data focused, and we expect a fourfold explosion of global data volume by 2025.
What is even more important is to understand the shift of where the location will be, where the data will be processed. Today, 80% of the data are processed in data centers and 20% at the edge. Tomorrow it will be the opposite. 80% will be processed at the edge and 20% in data center, whether it is public and private. Moreover, the need of the data processing will be also linked to latency and proximity. There will be also a demand for security and sovereignty, two areas where we are extremely strong. Today we are positioned in three very attractive markets. Number one, the end-to-end cybersecurity market, which is expected to grow at 8.3% CAGR for the next year. You know that cyber attacks are increasing more and more.
Number two, dedicated compute for AI/ML, in which we develop specific computing solution for application requiring super computers, processing billions of billions of operation to solve complex data challenge in simulation research such as healthcare simulation, weather forecast simulation. This market will grow 5.8% CAGR and where BDS today is strongly positioned. On the right of the slide you have the edge on 5G computing to treat the booming data production coming from 5G connected IoT such as sensors or robots. This market is more nascent but will grow at 10.8% moving forward. If we go to the next slide, what is BDS market position? In the cybersecurity market, we are the number one leading player in terms of managed security, providing key services in consulting, sovereign solution, mission-critical system.
As it has been mentioned, this is recognized by Gartner, and we forecast to continue to grow above the current market growth. In the high-performance computing and quantum markets, we are the third player worldwide with strong position in Europe. Important, very important to remind that we are the unique manufacturer in Europe. This will be and this is crucial for the European sovereignty. Our investment in quantum is also key, as you may know that security keys may fall off when the quantum computing will develop on a large scale. In addition, we are strongly exposed in the relatively new market of edge computing. We offer integrated business-critical application or AI/ML solution with the BDS edge computing server. This business is offering attractive business growth perspective.
Thanks to our Ipsotek acquisition that we did last year, which is all about computer vision, we have developed some very good market traction in manufacturing, logistics, transport industry. As an example, we can mention that BDS processes massive video feeds with our BDS servers for video surveillance and improve logistics, goods and passenger tracking in many and various airports in the world. Our capacity to develop, as I just explained, synergy with our business combining computing, security and AI/ML is a key differentiator for our customers. With the next slide, one of the reason of our success is also linked to our acquisition, but also linked to strong partnership ecosystem we developed and expanded over the past year. Let me highlight some example.
First of all, for the technology part, we have very strong partnership with Intel, with NVIDIA, which is very key for us in the HPC business. In terms of acquisition for portfolio, I mentioned some of them already, but the acquisition of Nimbix and Paladion have brought new expertise, specifically number one in automation and AI/ML with Paladion for cybersecurity. Number two with Nimbix for cloud orchestration and HPC as a service. Let me also quote Dell. Dell is a new partner for BDS. We complemented the catalog of Dell with our high-end server, specifically designed for large and complex database such as Oracle. Last but not least, we have expanded our partnership with the hyperscaler, whether it is Azure, AWS or Google, for which we provide high-end server and cyber services. Let's move to the next slide.
Another key reason why we are very strong is that we are heavily committed in R&D. Our strong team of 1,200 PhD and engineers, and our significant investment, which represent 8% of our total revenue, enable us to develop a number of assets and notably patents, of which we have as at moment 1,800 active patents, but last year we added again 50 new ones. Thanks to these patents, we are able to reinforce our position in various areas. For instance, it's enable us to become number one in AI/ML security engine with managed security, which led us to gain significant market share. I will give you some example, and you will understand more later. We are also well-positioned in cryptography as we bring the trusted cryptography layer towards hyperscaler cloud and application provider.
We have also developed a unique sovereign data intelligence solution, which is an alternative to Palantir for European industry. On the computer side, I like to quote a few examples that highlight our leading innovation capability. We are number one in Green500 computer and the first hot water direct cooling technology in the world, leading to the most efficient low-carbon compute capacity and compute density in a rack, the most efficient in a rack. This is very important, and we are very well positioned on that, and it will be very important for the future. If we can move forward on the script. If we go to the most important part for us, which is our customer. Let me give you on this slide the relevance of our solution for business and organization.
I would like to highlight a few examples to illustrate the power of our solution. First of all, in digital security, the first example is the Olympic Games, the largest event worldwide with over 3 billion in audience. This example demonstrates our capacity to deliver security solutions in complex and very dense cloud ecosystem. To quantify the amount of work that our security solutions are challenged with, I'll share with you two numbers, two very important numbers. The Olympic Games in Rio, we experienced 400 cyber attacks per second. 400 cyber attacks per second. In Tokyo, we experienced 800 cyber attacks per second. Without our AI-based solution, it would have been impossible to handle this amount of attacks. With more time passing, the more our machine learning solution will become and are powerful, which adds strong entry barrier to our business.
This is thanks to that we are number one. The second example is Doctolib, which is also very important to understand. We have designed and protected all the data of doctors and patients, you know, on the AWS cloud, which is very critical for the healthcare industry. The other example, VITA, on the top of this slide, is also a good example of our capability to win market share in the competitive US market. In advanced computing, thanks to our solution, we are the worldwide provider of Google Cloud. We provide them with high-end server and a full managed services to deliver Google bare metal services. We provide Jülich that you see on the slide as well, which is the largest research center in Germany with BDS HPC solution.
What is important is to understand that Jülich is at the forefront of the next Exascale HPC project in Europe. We are the European leader for weather forecast simulation with our HPC business with ECMWF. Overall, we have a customer base of over 700 customers, but even more important, 72% of our revenue is with our long-lasting customers that are with us for more than five years. Which shows our ability to create long-term relationships and the validity of our solution portfolio. If we move to the next slide, looking ahead, for digital security first, we'll continue having sustainable business growth above the market organic growth with improved profitability. On the left side of the slide, I want to highlight some of the assets we use.
Number 1, we broaden the footprint with talent and attractive offering, enriched by recent acquisition we made. We are investing and we continue to invest in AI/ML capability. You understand this is very critical for us, and it will continue to create entry barrier and intellectual property in our cyber technology. We have 5 differentiated driver to continue to grow. Number 1, this is strengthening our portfolio with partners and asset. Number 2, we reinforce our R&D, especially in the domain of cyber asset and automation. We partner with hyperscaler to develop joint offering and go-to-market strategy. We boost consulting activity in cybersecurity for cloud IoT by capitalizing on recent acquisitions such as SEC Consult. We continue to leverage our customer install base and grab new market share and new customers, especially in U.S., in Europe, Middle East and Africa.
If we move to the next slide, we are expecting advanced computing to be back on a strong trajectory growth. What is important to understand is that in 2021 and beginning of 2022, the HPC business was strongly impacted by the component shortage, especially in last generation components, which heavily impacted our business and project delivery. At the same time, we were repositioning our portfolio to the high-end high-performance computing because the middle range is now jeopardized by the public cloud. We expect a significant jump-start at the end of the second half of 2022 and strong growth going forward, mainly driven by the next generation exascale HPC demand, driven by various region, including Europe. To drive future growth, we'll focus on addressing high-end HPC market to generate significant opportunity from 2023 onwards, with first exa and peta-scale deals.
Having also successful inroads into promising HPC as a service market with our acquisition of Nimbix in the US. Delivering new dynamic in edge and AI supported by vertical use case approach. I gave you already some example of the success we have in edge computing with Ipsotek, with the airport example I gave you. I can mention as well that in the HPC, we have been able to win 5 among the top European HPC deals. 7 deals in total, we won 5 of these deals. We continue to improve our go-to markets as we move to solution as a service with direct efficient sales and ongoing recruitment plan, opening new channel to market and developing synergy with digital business as Philippe and Rakesh explained.
If you go to the next slide in terms of operating margin, we are targeting recovery as a continuous strong growth in cybersecurity. Allowing better fixed cost absorption. We are evolving our portfolio towards higher margin activities such as sovereign cloud, security consulting, big data software as a service offering, as well as specialized offering for dedicated vertical industry, as we explained before, such as dedicated business for research center, healthcare, defense, transport, manufacturing. On the cost base, we will pursue offshoring development when possible with 70% of the net evolution in low-cost country. This will be for the main driver, and we'll keep onshore when absolutely needed, for example, in security and consulting. Automation and scale will be super important for us, and represent another lever, especially in managed security services, allowing for maximization and optimization of our global centers.
Over the next five years, we expect total RI costs, which will be at a level of EUR 42 million. To summarize BDS, we understand that we are a very strong asset. We are a leader, a global leader in cybersecurity and advanced computing, two high-growth activities in the digital economy. Sovereignty will continue to be more and more important and will be a business driver for us. We have a very strong installed base of customers with 700 customers worldwide, thanks to our reinforced R&D effort. We continue to develop innovation and thought leadership with them, which will also enable us to grow with new customers. We'll continue leveraging strong partnerships and strategic acquisitions to expand our business footprint in digital capabilities, and we'll combine our digital, security and advanced computing activities with unique synergies and AI/ML at the core toward dedicated vertical industries.
Through our transformation plan, we are targeting a step up in the revenue growth through HPC portfolio, repositioning and outperforming business growth in digital security. We also plan a step up in operating margin by both volume and cost base improvement. I thank you for your attention, and I know that we have a break now, a coffee break of 15 minutes. Thank you.
Hello, everyone. Good morning. I think it will be hard, Thomas, to get everybody back from the coffee, so. Well, anyhow, thank you. Thank you for being here. I'm Nourdine Bihmane. I'm leading the Tech Foundations unit, and I'm really pleased to be with you today as we embark into that new chapter of our company. Since February, when Tech Foundations has been launched, I have been visiting our employees across several countries, visiting also our top customers and also our partners. Let me tell you one thing. I have been amazed by the passion of our team on the ground, the deep trust of our customers, and also the strong and innovative ecosystem of our partners. Today I will share with you the findings of my assessment.
Some of that are around our strengths, the rest are also our challenges, but more importantly about our turnaround plan to help us putting back Tech Foundations on track. Let me begin initially with a quick overview of our business. Tech Foundations is one of the global leader in managed infrastructure services and digital workplace. We have more than 48,000 committed employee guided by one mission: designing, building, and managing IT complex environment for our customer worldwide. We serve more than 1,200 customer across the world, and we are mostly present in Europe, which represents circa 70% of our revenue. Since I took over, we performed a comprehensive review of the portfolio with Rodolphe, and we have decided to only continue the process of selling our unified communication and collaboration business. Moving forward, we will exclude the UCC numbers from our presentation.
In 2021, we delivered EUR 5.4 billion, which represent over half of the Atos revenue. It's true that our business portfolio has emerged from the infrastructure and data management portfolio. However, we have enhanced it with new hybrid offering around private cloud and also a strong professional services arm. Given the mission-critical nature of our business, we are signing long-term contract, which enable us to have sizable recurrent revenue and long-term backlog. If we move to the portfolio, its span address more than 75% of the CIO budget and cover key priorities. First, the core infrastructure, which helps CIO managing end-to-end complex and critical IT system and ensure their business continuity. Most of our CIO mention that system modernization is a key priority for them, so our private cloud and platform address exactly that.
Last achievement has been the launch in November of our Atos Sovereign Shield for the dedicated and cloud data sovereign offering. Our digital workplace offering support our customer in reimagining their employee experience in a hybrid work environment that has become the norm. Our focus is more and more into productivity and sentiment analysis, where we are embarking more data-driven engine to enable those kind of services. Our professional services are benefiting of a strong local network of agencies supporting our customer in their migration to multi-cloud environment from advisory to setup and installation. In addition to that, we have a BPO business process outsourcing offering, which is mostly serving our British market. Our business has been recognized by the market.
We are leaders in digital workplace now six years in a row, delivering that offering in digital workplace, but also in hybrid infrastructure nine years in Europe and four years in the US. We are also enjoying a strong ecosystem of partners, which some of them were benefiting from the highest tier partnership. As a matter of fact, with Dell, we have been awarded the leading global system integrator and partner of the year 2021. This is the fruit of our continuous investment in our joint offering around multi-cloud. Similarly, with Nexthink, we have invested into that relation the last three years, driving with them the digital employee experience management, and now we have the largest base that they have with more than 1.2 million users. If we move to the next slide, on the customer.
A large part of our client base is made of large blue-chip private sector clients, especially in Europe, where we serve most of the Euronext-listed companies. We have a strong presence in highly regulated data-sensitive industries such as public sector, healthcare, and financial services. We serve some of the leading public sector agencies such as State of Texas in the U.S. or Ministry of the Armed Forces in France. Customer satisfaction and confidence are the driving force for our business. We are thrilled to have a Net Promoter Score, which is 20 points above industry standards. This is a big validation of our quality of services. Our relationships with our clients are long-running, with an average length of almost 10 years for 700 of them.
Combined with a high renewal rate of 94% in Europe, it further show our client trust in our team to enable their IT digital transformation journey. From running and modernizing their digital infrastructure to designing their path to multi-cloud. Finally, I would like to mention a relationship I'm really proud of. We are the worldwide IT partner for the Olympics and Paralympics for the last 30 years. We are the lead integrator responsible of orchestrating, securing, and transforming all the IT system running the Olympic Games. From accreditation management to result distribution, the technology provided by Atos play a key role in making the games on time, every time.
As we move to a new IT delivery model over the cloud, it has brought benefits in terms of performance, almost near instant transmission and sustainability by reducing the need of physical servers from one edition to the other, ensuring a secure and safe digital experience for billions of fans across the world. I would like to thank the IOC and Thomas for their continuous support. We support one of the largest mission-critical infrastructure bases globally. To bring that to life, I would like to share with you some metrics. 4.3 million managed end-user devices. More than 50,000 servers on-prem and virtual servers. More than 500,000 MIPS in our mainframe operation. Again, this asset base is one of the largest in the world, allowing to serve clients at scale and drive retention in our customer base.
In addition to these assets, we have 9 global delivery centers around the world. This delivery footprint allows us to optimize based on customer need, our operation cost, and create a competitive nearshore option for our customer in regulated industries. Our talent base has more than 12,000 network and cloud specialists, with over 10,000 of them benefiting from a multi-cloud platform certification. We have a large library of AI and ML assets that we are aggregating around our modern delivery platform. It will allow us to shift all operational data into one platform and then leveraging artificial intelligence and machine learning to drive autonomous operation in the near future. Let's focus on the data center. More than 110 over 48 countries. This is a key differentiator for what's going forward. Why?
60% of them are located in data sensitive areas, which will grant us a strong foothold to capture growth in private cloud, as we mentioned before, but also in sovereign cloud offering. Furthermore, we are the founding member of Gaia-X, the European Consortium created to build the most secure and transparent data framework for Europe. 50% of our data centers are located in metropolitan area, which is helping us being directly interconnected to the hyperscaler ecosystem. It will ensure us a low latency and a good positioning to seize the opportunity in metro edge cloud. The market has recognized by the way those strengths, and we have already seen outreach from hyperscaler and regional player to partner with us to launch sovereign cloud offering, especially in Europe. The topic of sustainability is a priority for us, and it has also entered the client boardroom.
As a result, we are aligning our offering with our client needs. As of today, IT is responsible for more than 4% of the CO2 emissions worldwide, growing by 10% every year. As the focus is transitioning from Scope 1 and Scope 2 now to Scope 3, addressing upstream and downstream of those emissions, our customers are increasingly expecting us to help them reducing their carbon footprint. We have ourselves set ambitious target for net zero achievement. It is worth here mentioning that 70% of our data centers are running already on renewable energy, and this is a key metric that we will be focusing on moving forward. Another example here, we have partnered with a French startup, HDF Energy, and we are launching in beginning of next year, the first hydrogen power data center in the world.
We're not stopping at reducing our own footprint. Rather, we are also helping our customer enhancing and reducing their carbon footprint emission through some innovative solution. On digital workplace, we have partnered with companies like Circular Computing in UK, where we are leveraging the zero-waste technology to deliver the first ever provided refurbished, certified carbon neutral desktop to our customer. On top of that, we have a unique setup contractually called Decarbonization Level Agreement, like Philippe was mentioning before. Through those DLAs, we are delivering between 50%-20% footprint reduction to our customer between the beginning and the end of any of our contracts. Through all those innovation and our commitment to sustainability, we are becoming the partner of choice for our customer in helping them reducing their carbon footprint, at the same time delivering their digital transformation.
In summary, we have built several sorts of differentiation. We already talked about the innovative portfolio and the hybrid cloud offering. Talked also about the data center, but I would like to highlight few points. We have a deep expertise in highly regulated data sensitive industries. 55% of our revenue is coming from public sector, financial services and healthcare. It allows us to have deep expertise on built-in solutions, especially like GDPR or even HIPAA, for healthcare to name a few of them. In addition, we are also building strong security clearance capability amongst our team and amongst all those industries, which makes really difficult to replicate that kind of workforce certification. We are also transforming our delivery by leveraging more and more artificial intelligence to drive those autonomous operations.
I mentioned the modern delivery platform, it will be a key component of our transformation program moving forward. Last but not least, we continue and we will maintain our position in leading the market in sustainability and cloud sovereignty. I really feel strongly about all those foundation and the trust of our customer, and that give us the right foundation to embark into the transformation chapter. However, reflecting back on our performance in the last year, we have some real structural and execution challenges. Over the last 18 months, we see that Tech Foundations have been underperforming in both revenue growth and operating margin. When you look here between 2020 and 2021, we lost almost EUR 700 million revenue, which correspond to 12% drop in terms of organic growth, while the market has been declining between 1% and 2%.
If you look a little bit more closely, you will see it is mostly driven by the core infrastructure and the VAR, the value-added resale business. For core infrastructure, it is coming mostly from, I would say, some large account in a few regions, like the Americas, who lost almost EUR 200 million, or Northern Europe, who saw a EUR 100 million contraction. For VAR, it is different story. The decline was intentional, and it was conscious decision to exit those non-strategic low-margin deals. By the way, this is something we are going to continue doing moving forward. Then if you look at that picture and you restate the VAR, the drop is circa 7%.
When we look at the other portfolio service line, you will see that in the digital workplace, we have been growing even above the market, thanks to the innovation injected into our offering and the service quality. It is, by the way, confirmed with a strong pipeline as of today of more than EUR 3.2 billion, which give us the confidence and the reassurance that we will continue into that trajectory. On private cloud and professional services, here we are growing in line with the market. Same thing here. We have a strong pipeline, respectively EUR 3 billion and EUR 2 billion for each of them, which same thing, give us the confidence that we are going to maintain that momentum. On the operating margin, you saw that we ended the year at -1.1%.
Obviously, when you see the market running between 2%-4%, there is room for improvement, and this is what we are going to address. Over the last three months, we have done a detailed analysis to identify the underlying root causes across both top line and bottom line. The idea was really to be able to embark all those lessons learned into our transformation plan and make sure that we addressing it. On the top line, there are really two major themes, the organizational structure and the fragmentation of the portfolio. If you remember, in 2020, we changed our organization structure, which was focused much more toward the vertical solution and operation, which led our infrastructure business getting deprioritized. This generated a loss of critical sales, but as well as delivery challenges in some accounts due to the lack of end-to-end accountability.
This also limited our capability to go after and win infrastructure large deals. In fact, in 2021, we won only 30% of our revenue from those large deals, while the market is operating around 30%-40%. Second, our fragmented portfolio across verticals and service lines resulted in a lack of clear focus and ability to make some targeted investments. Some of our subscale offerings suffered from lack of investment and focus. In addition, we were delayed in modernizing our portfolio and entering areas like cloud consulting and hyperscaler partnerships. On operating margin, the primary root cause was our unfavorable labor footprint.
There are multiple aspects to it, as you could imagine, a lower offshoring rate, a lower utilization rate, but also a pretty strict or at least constrained workforce, where more than 30% of our workforce is sitting in high social cost countries, leading to some stranded costs, given difficulty in restructuring in those countries. We had also issues in inability to fulfill demand and hire talent in key locations, which increased our leverage and our use of subcontractors. Finally, there were pockets where we lacked disciplined contracting, commercial discipline, which led us to sign contracts with unfavorable terms. I could mention penalties, scope creep, and so on. Having acknowledged all those challenges, we have developed a clear and a realistic five-year turnaround plan to fix them.
The plan basically has three components. A refocus phase, where the objective is really to rationalize our fragmented portfolio and focus our management into the right offering. A recover phase, where we are going to address deeply our cost structure. A rebound phase, where we are going to invest in sales capability and modernizing our portfolio to drive the growth. While operationally we have set high goals across all those areas, again, we have created a realistic plan, a realistic financial plan. The output of that will be stabilizing our revenue by 2025 and pivoting it to growth by 2026. More than 600 basis points improvement in our operating margin, and EUR 150 million of free cash flow by 2026 before interest and tax.
Our first order of business in analyzing our performance has been to clearly understand our account segmentation. As you could see in the slide, 13% of our revenue comes from accounts with negative project margin. To note here, project margin means mostly gross margin for you. This is mostly driven by contract discipline and unfavorable labor mix, as I mentioned before. We have targeted action plan to turn around those substandard margin accounts while exiting the long tail of a small red accounts, as Rodolphe was mentioning. To achieve the turnaround, we are implementing key actions to improve the project margin. This includes commercial actions, such as renegotiating proactively with the customer, increasing the contract discipline, driving add-ons and change requests, and obviously resetting prices, especially in the context of inflation that we live actually.
Operationally, we'll be mostly focusing on reducing overhead and optimizing the delivery. By the way, we have already seen some first positive results of some of those actions. We strongly believe that most of the majority of those accounts can be turned around, excepting maybe a few accounts which we will have to exit. Through our recovery phase, we intend to reset the cost structure through the following key areas. First, as I mentioned, adjusting the labor. It is a matter of improving our rightshoring mix and improving the number of junior mix into our customer base. Second, transforming the people supply chain by increasing our ability to upskill our employees and hiring talent with more next-gen skills. Third, increasing our delivery productivity. I talked about the modern delivery platform. We need to continuously drive to more autonomous operations.
That's the future for Managed Services. Fourth, resetting the stranded cost and mention that we will have to address some stranded costs in some high social constraint country, and that will be part of the plan. Last, optimizing our third-party cost in both subcontractor but also our data center and office footprint, which will have to be reduced. All of that will generate a gross yearly saving of EUR 480 million by 2026. For that, we will have to invest EUR 850 million in our transformation plan. One point I would like to make here, these levers sounds familiar and are not unique. However, we will need a strong execution discipline. Here, I need to recognize we have historically struggled to execute those changes at scales, as we were mostly missing the structural funding to get it done.
Now, with the funding cleared, we have built bottom-up plan by account, by service line, by delivery centers, and we have tested all our targets against industry benchmark, and now are in the process of cascading it to our next level of top manager layer in Tech Foundations. The plan has been underpinned by operational metric, as you could imagine, that we will track closely. You will see a few example here, but we have created for each of them a set of milestone that we will measure progress every month, every quarter. To make it more realistic, we have modeled improvement between 10% and 30% for each of them into our financial plan. Remember, our ambition is much higher to improve those metric.
Of course, we believe it's critical to transform our cost structure to improve our competitiveness, but we will have to go beyond that to turn around totally the situation. However, we'll be laser-focused on customer quality, workforce reskilling, and capability improvement. We will ensure that this transformation is seamless for our customer, who remain our number one priority. In parallel to resetting the cost structure, we will drive a comprehensive commercial transformation to stabilize revenue first, as you could imagine, and then prepare the pivot to growth. The key levers for this transformation will be the improvement of our revenue retention to be able to stabilize the revenue and improve its translation into backlog for the next years. Here, we are targeting a 20% transformation.
We'll do that through targeted investment in some account to beef up delivery and accelerate some renewal, including the transformation of the landscape of our customer. On top of that, we will double down in our top 150 customer. They represent 80% of our revenue. Here, we'll have to contribute with more add-on and change request. The objective here is to get to almost 13% of our revenue coming from that fertilization done on top of our account, where today we are operating around 9%. We are also planning to focus on winning large deals and new logo through a creation of a large deal team. This deal team will be dedicated, directly reporting to a new function, a chief commercial officer, which will be complemented with a business development leader to identify new hunting opportunity.
To give you a little bit of sense of where we are today, to date, or at least last year, only 1% of our revenue has been generated with new logo, where the benchmark is more around 4%. Here we also have a huge gap to close. I would like to stress the fact that while we are currently working on rebuilding the pipeline, the sales cycles in our business is between 12 and 18 months. It will take time, some time to see the full result of those commercial initiative. We are also in the process of significantly scaling our hyperscaler alliance and our multi-cloud offering. In addition to all of that, we believe there is still potential that has not been put in the plan, but to be able to expand our new revenue streams.
Let me share with you what those new revenue stream could look like. Remember, our DNA, the DNA in Atos, the DNA in Tech Foundations, has been to managing and operating the core, the core IT system of our customer and their digital workplace. You could easily think that the adjacent move next to it will be to move that management skills and capability from managing the core and the private cloud to more edge cloud and sovereign cloud, which are really the next revenue stream that we are already investing in. For the digital workplace will be to move our intelligent collaboration offering and aggregate into it more augmented reality and virtual reality. Easily after that, really the next step will be to move to our digital platform, yeah. If we could move on. Thank you.
At the end of the day, what we are trying to intend is moving from operating today digital infrastructure for our customer to helping them tomorrow engineering their digital backbone. That's really the vision that I have and that my team have for Tech Foundations as evolution of their portfolio. Obviously, data and analytics will be a key cornerstone into that portfolio evolution. What does it look like in terms of figures? By executing that plan, as I mentioned, we aim to stabilize our revenue by 2024 and pivot to grow by 2025. You will see in our management model, we have accounted for the lingering effect of some recent execution issue, as well as the time required to turn around the sales performance.
By 2024, we are fully ready. However, we are really confident that we will see that significant turnaround in 2024, which will translate into revenue growth in subsequent years. Zooming on. Digital workplace and professional services, as I mentioned before, these areas are currently growing, and we're expecting them to continue and maintain the momentum, which is circa 3% for both of them. As part of it, we will continue evolving our portfolio. To mention one, on professional services, we will start enhancing it with more advisory services. The second bucket is the total infrastructure. As you have seen, the core infrastructure will still continue to drop in the next two years, while private cloud and platform will continue to grow. Those two buckets are linked, in fact, and part of the core infrastructure is translated into that private cloud and platform bucket.
We expect to stabilize it by 2024, and then starting growing after that. Again, this is in accordance with the deep study that we did on our legacy infrastructure, including already, and we took into account, the potential workload that will be migrating to the cloud over the next four years. Here on that slide, the main point I wanted to highlight is we have already begun the transformation, yeah? We begun with some quick wins and action that do not require restructuring, such as exiting or reshaping our portfolio, exiting the low margin account, the VAR business, but also reigniting our account management. Going forward, we will also manage the labor restructuring plan in a phased manner to account in the essential funding and also the social processes and social governance.
Last but not least, we are not waiting, and we are already seeding the base of tomorrow top line. To fund that turnaround plan, we are investing EUR 1 billion across two buckets. On the one hand, EUR 200 million across delivery reskilling, building up the large deal team and the hunting team, improving our sales capability, including accelerating the incentive scheme for that population. On the other side, the restructuring bucket, which is mostly to generate the EUR 480 million yearly growth savings by 2026, as I mentioned. Let's move to the next slide. In a nutshell, we are aiming at the following from a financial standpoint. Pivot to growth by 2025 after reaching a low point expecting in 2024. Operating margin above 5% by 2026.
The free cash flow before interest and tax at EUR 150 million, and then expected to continue growing by approximately EUR 50 million every year after. Please note that this view here is still 2026. Our turnaround plan will continue beyond that, yeah? Our current model does not include potential upside, as I mentioned before, that we can get through acceleration of our portfolio shift or higher growth value added, like we mentioned sovereign cloud, edge, or data analytics. While the study of a potential execution of the contemplated separation will need focus, we have already worked on our future organizational setup. We think it to be specially designed to support the contemplated transformation plan while taking care of the day-to-day business. I have already identified strong leaders with more than 20 years of industry experience and a strong track record executing successful transformation.
Like we have in the room today, Darren, my senior CFO, who has been in this market, in the infrastructure market for many years already. Amy Brown, our experienced CHRO, who led already those complex HR transformation. Even Laurent Barbet, my trusted friend here in the room, who has been already making those deep transformation of our delivery model. In conclusion, I'm extremely excited. If we move to the next slide. I'm extremely excited about the contemplated transformation plan that we have built and the journey ahead for Tech Foundations.
I am confident that we'll be able to execute this plan, and this plan will deliver on, as I mentioned, delivering and stabilizing the revenue by 2025 and moving to grow by 2026, aligning our margin to our peers and to the industry margin benchmark by 2025 and 2026 even, having a better cash transformation and cash conversion for our business. Continuing investing in our portfolio and being the leader in digital workplace and the digital backbone moving forward, and keeping our industry, our leading industry position in sovereignty and sustainability. Obviously, all of that with a revamped organization and a fantastic and significantly transformed upskill employee base. I would like to thank you for your attention, and I will pass now the mic to Stéphane. Thank you.
Thank you, Nourdine Bihmane. Good morning, everyone. I am Stéphane Lhopiteau, Group CFO of Atos, position that I recently took over one month and a half ago. My financial background is with tech and large project-driven industries, having specifically served as CFO of Naval Group, Deputy CFO of Thales, or as Chief Financial and Legal Officer of Areva, and then Orano. As you noticed from the presentation of my colleagues, a lot of work has already been done to get to this point, and there is still more to come with all the teams looking forward to embarking on this transformation journey. Now let's get to the financing implication of such transformation journey. As Rodolphe Belmer and Diane Galbe presented earlier, if we move forward with this project, each new company would basically add its own ambitious strategic roadmap.
The turnaround plan for Tech Foundations and an acceleration plan for SpinCo, enabling them to properly reinforce their businesses in order to position the two companies for long-term growth. As we move forward with the separation process under study, we will be focused on running the group's business. Such a separation and transformation plan will also require a financing plan to address our immediate funding needs and to ensure we have a smooth transition with all our stakeholders. Through this process, both SpinCo and Tech Foundations would end up with their own capital structures, which would be adapted to their respective financial profiles and objectives. In terms of, scope of business and related financial, SpinCo and Tech Foundations have been set as follows under the new structure.
As disclosed earlier this year, Atos generated EUR 10.8 billion revenues in 2021 for an operating margin of 3.5% and with a free cash flow of -EUR 419 million. If we exclude UCC, which is, as you know, a business that we have held for sale, Atos 2021 revenues stand at EUR 10.2 billion for an operating margin of 3.1% and with a free cash flow of -EUR 464 million. Now, given that my colleagues have already presented in detail the financial profiles of TFCco and SpinCo, I prefer to spend my time introducing how we prepare these figures for both the 2021 baseline and the business plans. As of now, I'd like to emphasize that the SpinCo and TFCco financials were estimated as explained on the page.
Revenues and operating margin of each business line were estimated quite precisely, but estimated based on customer projects and by profits cost centers. The flow down of balance sheet items like reserve for contingencies or working capital position. The flow down of this item into free cash flow were allocated to the two companies based on allocation keys. Hence, going forward, as the spin-off is recorded in our management tools, small variances may arise with some potential adjustment to the 2021 pro forma figures currently disclosed on this page. For example, at the 2022 year-end, when the 2022 figures will face the refined 2021 figures. That being said, I would like to move to an even more important matter, which is the funding needs related to our transformation plan, started with the transformation cost.
We provide on this slide with the phasing details of expenses for both the TFCco's turnaround plan and the SpinCo's acceleration plan that might be recorded as either restructuring or operating expenses. Of the total EUR 1.5 billion restructuring and investment costs that were already introduced by my colleagues, circa EUR 900 million will be spent over the course of 2022 and 2023, of which approximately two-thirds will be allocated to TFCco and one-third to SpinCo. If we broaden our scope to 2026, we expect that total expenses for TFCco would amount to circa EUR 1.1 billion, of which EUR 900 million should be restructuring costs and EUR 200 million OpEx. Over the same period, total expenses for SpinCo would add up to circa EUR 400 million, of which EUR 300 million would be restructuring and EUR 100 million OpEx.
Reiterating what my colleagues mentioned, these investments are key to reinforce and improve their activities and portfolios in order to drive strong performance and cash flow improvement. Such investments are a key component of our funding requirements for the transition period until the envisioned spin-off as introduced on the next page. This page discloses Atos' cash position and its evolution over 2022 and 2023 before considering any funding resources for that period of time. Let me explain. By the end of 2021, Atos' cash position on your left-hand side was EUR 3.4 billion. With that, we expect to cover a number of items that we anticipate as EUR 1.4 billion cash outflows for 2022 and 2023.
These items include the EUR 900 million transformation cost, which I mentioned on the previous slide, the Cloudreach acquisition, and a planned increase in working capital requirements. Such increase in working capital requirement is assumed in relation with ambitious objective we have with customers and suppliers in terms of partnerships, developments or prices evolution, which will prevent us from pushing too hard on the working capital variances at the same time. Separately, we have a number of maturities that are coming up, which is approximately EUR 1.5 billion in debt repaid over the course of 2022 and 2023. Then we have the EUR 700 million proceeds expected from the disposal mentioned earlier by Rodolphe. Such disposal will come out of a broader pool of non-core assets, which have already attracted significant investor interest.
We have already achieved part of it just yesterday evening with the sale of our shares in Worldline for EUR 220 million, net of the purchase of call option that we made at the same time to hedge our remaining obligation under the Worldline exchangeable bonds. Adding all this up, we should have EUR 1.2 billion in cash by the end of 2023. At the same time, in order to ensure a smooth execution of our transformation plan and to run our business as usual, we estimate that we need to hold EUR 2.8 billion in cash at the end of 2023. This funding will be partly for strategic cash as a buffer, and the rest will allow us to cover usual intra-year working capital swings.
Consequently, with our EUR 1.2 billion estimate in cash by the end of 2023, our total financing needs to fund this EUR 2.8 billion cash balance target at the end of 2023 are EUR 1.6 billion. In order to cover this EUR 1.6 billion financing needs over the interim period until the end of 2023, we can rely on the following resources. Overall, our plan to cover the funding requirements of EUR 1.6 billion is with liquidity at hand and with our financing partners. For the time being, we have an undrawn EUR 2.4 billion RCF, revolving credit facility, which matures in the end of 2025. We also have that buffer of over EUR 1 billion in strategic cash that I just mentioned on the previous page.
In order to consolidate such resources over the transition period from today until the potential spin-off date, our planned financing option is to set up with our bank partners, first, a EUR 1.5 billion term loan. Second, the remaining EUR 900 million portion of RCF, which is basically the existing undrawn RCF reduced by the amount that will be raised via the term loan syndication. And finally, third, on top of it, we will also secure our proceeds from disposal with a EUR 700 million bridge to such disposal, which is now going to be reduced to only EUR 500 million, as the sale of the Worldline shares is behind us. Moving forward, we will be actively working with our financing partners in the coming weeks and months to reach a conclusion on such funding plan.
We are in advanced negotiation with two of our financing banks to lead the syndication. We got confirmation from those two banks that there should be appetite for that plan. In anticipation for the spin-off under study, we will also have to prepare over the next month and, as part of our transformation plan, we will have to prepare for the capital structures of both SpinCo and TFCco. The specificities of the dedicated capital structures for each new company are also a key reason to pursue this potential separation. As standalone companies, the capital structures of TFCco and SpinCo will be designed and tailored to their respective funding needs, financial profile, and deleveraging capacities.
SpinCo's strong cash generation and ability to deleverage quickly would enable this company to bear most of the Atos existing debt at inception. As of 2024, we expect the net debt financial leverage ratio of that company to be below 3x. This would leave some room for bolt-on M&A opportunities in order to expand capabilities offering and to increase leadership positions. As we detailed in a previous slide, the remaining costs of the SpinCo's acceleration plan should not exceed EUR 100 million over 2024-2026. Turning now to TFCco. The remaining turnaround cost assumed by TFCco, which we estimate to a total of EUR 500 million over the same period, 2024-2026, combined with a return to positive free cash flow in 2026, would limit the entity's ability to support leverage at spin-off.
The disposal of the TFCco's remaining stake in SpinCo should largely contribute to the funding of TFCco's need over that period of time. We will have more details on the capital structures for SpinCo and TFCco in the coming months after completion of the ongoing in-depth analysis. Our financing plan is to provide all needed resources to fund our transformation journey. With that in mind, I will now pass it back to Rodolphe. Thank you for your attention.
Thank you very much, Stéphane. Well, we are now coming to the end of this session. Today, as a conclusion, I would say that we are announcing the project to separate Atos into two distinct companies, both with strong value creation potential and a distinct equity story. Eviden will be a growth company delivering 7% organic revenue CAGR and a substantial improvement in operating margin up to 12% in 2026, and a cash flow generation of EUR 700 million that same year. TFCco, which is the new Atos, will be a turnaround equity story with a solid perspective of strong cash flow generation with EUR 150 million in 2026, growing around EUR 50 million annually thereafter.
If the project is approved, the entire Atos organization, the great and talented women and men of this great company, will be totally and immediately focused and dedicated to the fast and determined execution of this transformation and separation project. On a personal note now, this new strategic project centered on the partition of the group in two independent units is rendering the group CEO position superfluous and supernumerary, which means that when the project is on track, I will step down no later than September 30. In the meantime, of course, I will focus with utmost engagement and determination on continuing to steer our great company in this, in the execution of this ambitious project and commit all my energy, experience, and efforts to put it on track. I would like now to call on stage for the closing remarks, Mr.
Bertrand Meunier, our Chairman, with whom I had the great honor and pleasure to work in this challenging period for the group, during which he has remarkably, relentlessly, and selflessly held the helm of the board and steered the company strategy together with the board. I would also insist that we have always entertained outstanding professional and also personal relationship, which is a rare privilege for a CEO. Mr. Chairman, dear Bertrand, the floor is yours.
Thank you, Rodolphe. First of all, I would like to personally thank Rodolphe for his, I would say, extremely professional, astute, and very hard work. Rodolphe joined the board as the CEO position at a particularly challenging time for Atos. He has overseen, in fact, a dynamic change program within the company and undertaken an ambitious strategic review regarding its future. Rodolphe and I have developed a close working relationship over the past months, and I have the greatest respect and admiration for him. It has been a privilege to work with you, Rodolphe, and I sincerely hope our paths will cross in the future. As of today, we are embarking on the next stage of our transformation journey. It is important, it is needed, it is urgent.
As the management has so clearly presented, Atos is a cutting-edge IT company with exceptional people, world-class competencies and highly valuable assets. It has become obvious that Atos has not been reaching its undoubted potential as a single entity. As a consequence, the board, with the help of Rodolphe, has focused its attention on conducting a comprehensive strategic review in order to understand the issue, rectify the situation, and maximize total stakeholder value. As a result, we have been studying the feasibility and value of a spin-off and, at the same time, undertaking a dynamic transformation program. The outcome will be, as it has been explained during this presentation, the creation of two separate and distinct entities more appropriately focused on their respective and different markets. This new focus will enable the undoubted potential of both businesses to be more easily unleashed and maximized.
As we move forward with this plan, our world-class management team will dedicate themselves to executing the transformation plan and to delivering the stakeholder value embedded in each company. I'm turning to you. Throughout this time, they will be, of course, fully supported by the board of directors. Thank you for joining today, and again, on behalf of not only myself, but on behalf of the board, the entire board, I would like to thank the management team and all who have been instrumental in getting us to this pivotal moment in the history of our company. I will now hand back to Rodolphe and his team for the Q&A session. Thank you.
The stage is ready now. Thank you for your attention. We're going to choose some time now to answer your questions if you have some with the entire team who is joining me on stage. There are some mics that can be distributed in the audience. If you have some questions, we are all yours, if I may say so, to answer your questions.
I am Voutychtis from LATSCO Family Office, small family office, and I lose a lot of money in Atos, more than 2 or 3 million EUR. I'm not very happy. Why announcing today, Mr. Belmer, that you leave a company? Why? It was not urgent. It is a very bad signal to the market. You have decided with board to restructure the company, and the same day you announce that you leave the company. It's incredible.
I guess this is not a question, meaning that there is no answer. Is there a question I can answer?
Hi. A question here. It's Frederic Boulan from Bank of America. You mentioned a few times that the spin-off is a project. Can you share with us what are the criteria to decide to move forward with it versus retaining the current setup? Is it all about shareholders agreement or is there also some deliverables internally that you want to hit? Secondly, if you can share with us the rationale of the spin versus the disposal of the data center hosting, which has been on the agenda for about a year, any discussions you've had and what prompted you to switch to this strategy? Thank you.
On the first question, the separation is a project and is subject to different considerations and notably the consultation and the discussion with our social partners. As you know, this kind of very structuring project is framed legally and should be taken in the perspective of the decision of a discussion with the social partners. Now other considerations like like financing, but one of the most important consideration and hypothesis is the discussion with the social partners. On the separation plan, the disposal plan, you have realized by yourself as through our presentation that we have changed a little bit the perimeter of the disposal plan. Not a little bit, we have changed the perimeter of the disposal plan.
We have said now that we would dispose of assets which are worth EUR 700 million in value. Stéphane Lhopiteau has specified that while part of it has been executed already overnight, raising EUR 220 million approximately, meaning that there is now EUR 480 million to be disposed.
Those assets are mostly in the Eviden perimeter, and that's assets which are non-core, which are, of course, relatively small, given the size of the amount we are looking for, which is EUR 480 million-EUR 500 million, and which have been subject to productive incoming interest from potential buyers, meaning that we are relatively confident that those disposals they could be executed relatively quickly down the road, and that's also why we have chosen this plan.
Michael Briest from UBS. A couple from me. Just in terms of the additional costs, obviously there's a refinancing involved here. There's gonna be advisors fees, there's gonna be the spin-off costs in a couple of years. From a tax and financing perspective, you know, the business is being created today with an optimized tax rate. That's presumably gonna have some compromise as well. Can you talk about those costs that investors have to bear over the next several years? Separately, you also said today that the margin will be at the low end of the 2022 range. Can you say what that means for cash flow and why it is? 'Cause the revenue outlook seems to be unchanged.
Yeah. I will start by the latter question, and then I will turn to Stéphane maybe for the first one. On the current trading for 2022 and how it compares with the guidance for 2022. What I said, to be very specific, and I insist on that because maybe I've not been understood well. Revenue for the moment, current trading, we are in line with the guidance. Cash flow in line with the guidance. Operating margin, we are in the lower half. I didn't say the lower end. I said the lower half of the guidance, which is a precision, I think, which is important. That does answer your question?
Why is the margin lower?
Why is it low? Why is it lower? It's lower, actually because we are a bit under pressure with the inflation, notably in salary in some countries, notably India and the US, which has been marked by a very significant inflation in that respect. The first question, Stéphane?
Yes. Yes. Regarding there were two parts in your question, so separation cost and tax cost in connection with the separation. We have made a preliminary assessment of such cost for sure, which was not disclosed because we don't disclose all the detail, but which is fully considered as part of this leverage ratio that we have for SpinCo at the inception date of 3x. It was going to be funded by part of the sale of the SpinCo shares held by TFCo just at the inception date.
Hi. Two questions from my side, please. First of all, for your spin-off, Eviden, the growth of 7% seems to be below the market growth of 8%-10%. Why is that? Secondly, should we expect any additional impairments related to the spin-off?
Well, on how we have built our turnaround program for Tech Foundations, for new Atos, and how we have built our acceleration program for Eviden, we have assumed, well, in essence, and if you want to take a sort of helicopter view, we have assumed we will partially catch up with the performance of the industry. You know, all of you know that, well, today our performance is lagging substantially behind the industry levels in many different respects, and we've put in place plan in which we will catch up partially with the industry average. We think it's a sort of prudent view.
Probably the bold view would be a bit higher than this one, but we thought that, well, for conservatism and to make sure that we set targets that we are certain to achieve, we would take that relatively conservative approach in which we catch up in the order of 60%-70% of the gap we have today with our peers.
Well, the plans were bottom up, but well, if you take that angle, that's the way to understand how we have made up our objectives.
Stéphane , maybe do you want to take it?
We currently don't have any indication of potential impairment based on the global business plan that we prepared. Now you know that Yves is indeed detailed in these kind of matters because we will have to translate this global business plan that were prepared by my colleagues into a more detailed business plan at the cash-generating units. We're going to go through this analysis all along our financial duties all through the years, and so we will see coming next. For the time being, no specific indication of additional impairment.
Great. I have two questions. Firstly, beyond the social consultations, are there any other approvals or major milestones that you need to do for the split specifically as it's been discussed with the French regulator in terms of the split of the business? And do you see any obstacles? Second question, this is not the first time that Atos has sort of talked about turnaround plans and sort of driving for growth and margin. You know, why are you convinced that this time around the strategy will work? And specifically, when we've seen IT services companies undertake such transformations, portfolio is quite important. I'd be curious to understand from the executives from your digital business, you know the state of the portfolio.
You know, you mentioned 9,000 sort of SAP people, but you talked up ServiceNow a lot. You know, how big is that? You know, how big are you and some of the other kind of cloud and application vendors? And then on cyber, what is the split between hardware, and software or IP and then pure services? And why are you convinced that that margin can accelerate despite I think what is still a lot of headwinds right now? Thank you.
On your first question, for the second set of questions, I will turn to my colleagues of Eviden and new Atos to answer your question. On the first question on the main considerations or approvals that are needed before this project materializes and becomes concrete. Well, there are some internal matters, of course. Well, the decision of the board. If I take exogenous considerations, there is the social consideration and the discussion with the social partners, as I said, and there is also some financing consideration and discussion with the current debt owner of the company. No subject matter for us.
We think that our partners will accompany us into this transformation, given the perspective it is drawing. That's why that's the two main exogenous considerations. How, why do we believe that this time we will make it? First, this time we believe that we're gonna make it because you mentioned a point that is very important and is related to portfolio. When you look at the portfolio that we have, being able to articulate especially the penetration of secure cloud on the market. Because when you look at the reality of cloud transformation on the marketplace, it's less than 10% for public cloud.
That means that the remaining 90% needs to be covered. When we understand what's going on in this market, the main issue that is preventing, let's say, legacy application to shift to public cloud is really the ability to demonstrate that we can have a secure, reliable and compliant environment. The fact and the following the announcement that we made last week, and we have additional, let's say, discussion with hyperscalers, and that's where we are generating a very strong interest. Because the penetration of our managed security services capability, the fact that we are also able to build up architectural design on both edge artificial intelligence and public cloud, that's really the value proposition that the market is looking for. We truly believe that, the power of this portfolio is gonna be a very strategic item for the near future.
On the other side, you talked about smart applications. What is related to SAP, Salesforce or ServiceNow, the Microsoft toolset. As Rakesh explained, we have a lot of skills in these areas. Not only reinforced by application, but also reinforced by verticals. Based on the acquisition that we've done, we are continuously also expanding those capabilities. Rakesh mentioned that we are going really fast in public cloud certification. With a clear roadmap and with numbers that are quite massive because we talked about, let's say, 20,000 certified public cloud employees in the digital organization, and we're gonna continue to expand.
One more time, back to your, for me, a point that you made, that it matters a lot, not only to us but to our clients and also to attract new talents. It's really the power of the portfolio. I'm convinced that by, let's say, combining both, digital security capability with cloud strategy and our application knowledge, that's gonna generate a very, very good value proposition on the marketplace.
Maybe just to o n the TFCo move, what make the big difference compared to yesterday, and I think I mentioned it in the presentation, is this time we have the funding. Yesterday we were announcing transformation with no funding. As you know, in that industry, we need some funding to make an impact. Thanks to Rodolphe and the team and the chairman, this time we are finally having the means to what we are aiming for. Yeah? Second, I will say that split is generating much more focus in terms of organization. Now you have a dedicated, I will say, managed services organization who could run the services like a managed services organization and not be into that double run or double model, which has been the struggle, a little bit, of Atos over the years. Yeah?
Third, we built bottom-up plan, and we embedded that into a realistic transformation timeline. Yeah? I could have been coming to you today and telling you, "Hey, in 18 months it's all done." That's not true. That's not true with the DNA of Atos. That's not true with what we need to deliver, especially with a European footprint. That's the more realistic plan that we will deliver this time.
If I may also add to that question. See, this time, what's different, if you look at, for example, the way we are approaching public cloud. Like Nourdine and Philippe said, we are going in with investments ahead of the curve, not only in developing the capability, but readying the talent pool today for the incoming demand 12, 18, 24 months. So preparing it in advance, and that definitely is a very significant difference. Now, although I talked about 10,000 people in the cloud, that is really the native cloud development. But to your previous very good point, ServiceNow, okay, so if you look at now the platform of platforms, is that currently we don't classify that as cloud revenue. But if you peel the onion, it is actually cloud. If you look at Salesforce, Force.com.
A lot of these technologies where we have may not be 10,000 people, but definitely, you know, 3,000-5,000 in each of these technologies, which is also helping us to sort of move forward. The rest of the business, whatever we do, frankly, even if some of the legacy work that we've been doing, we see in every customer situation a need to modernize the platform. Really, that really gives us tremendous confidence in our capability to execute and deliver. I think this would be a very subtle difference compared to probably the previous times we may have come back to you. Thanks for a great question.
Maybe then one last word on security, as we mentioned, and you asked several questions on security. Number one, as I explained, we managed to grow above the market growth in the past, and we'll continue to grow above the market growth. In terms of portfolio, we are invested, and we'll invest more in terms of R&D, as we mentioned, between service and product and assets, so more and more our activity is also more asset-based. I gave this example of the Olympic Games. Without our strong AI/ML tool, we would not have been able to secure the Olympic Games, and we continue to invest into that. On top, as my colleague mentioned, one of the reason also the hyperscaler are very interesting to work with us on security, in line with sovereign cloud, is because we have both services and IP as well.
Thanks. It's Adam Wood from Morgan Stanley. Could I just start with a clarification that you talked about the business having leverage of under 3x OMDA in 2024, but I think also at inception. Could you just clarify what the leverage rates will be and maybe tell us what you think the peak leverage will be in the SpinCo business? Then secondly, I think, you know, almost every investor I speak to is at least expecting a slowdown, if not a full-blown recession over the next kind of 18 months, definitely in Europe and possibly in the US. What we're seeing is, you know, a lot less risk appetite for companies running leverage. We're seeing credit spreads increase.
Could you just talk about why the decision to put leverage on that business, particularly given that market backdrop, rather than maybe using a mix of equity and debt to de-risk the profile of the business? Finally, could you tell us what you expect the interest costs to be on that debt, at peak leverage, please? Thank you.
A lot of questions. Thank you very much. On how we have chosen to finance this transformation program and the two companies, we have decided that we would finance it entirely through debt and through the disposals, the EUR 700 million that we have mentioned, plus the 30% of SpinCo that would be returned by TFCo and sold to finance for the restructuring plan, the EUR 1.1 billion that's needed to restructure TFCo and bring it back into a positive cash flow territory.
It means that we have been clear on that, and it's a decision that we have taken with the board, that there will, there won't be any equity raise, any right issue to finance for the company. In terms of leverage, of course, it means that the entire debt load of the company, initially of the Atos Group today, has to be carried by SpinCo. Why? Because initially, as you have realized by yourself, TF, TFCo margin is in negative territory. Its level of OMDA is very low, and it cannot carry any substantial debt load, even though it could get a very small portion, but not significant. Meaning that most of the debt of Atos initially is based on SpinCo.
As you have seen, SpinCo, Eviden, as we call it now, has a very healthy OMDA, around EUR 1 billion per year, which means that its ability to deleverage is quite substantial. We said during the presentation that we commit to reach a leverage of below 3 x as of 2024, but the actual figures that we have in our plans is much lower than that. It's lower than 2.5 x. What we said is that we don't commit to stay below 2.5, because we want, if need be, no decision taken yet, to keep some buffer, some flexibility to invest and relaunch our bolt-on acquisition strategy. That's what it means.
In terms of deleveraging, the deleveraging will be very fast and rapidly. 2024, it's tomorrow, we'll come back in very solid, I would say, zone. That's for the first one. I'm sorry, you asked me a question, maybe I've forgotten some. Peak leverage, I'm like, I'm not sure we are communicating on that. It will be higher than the figures I've mentioned in the first year. Above 3x. I'm sure we communicate on that.
3x , yes.
3 x?
Yes, 3x .
Yes. Yeah.
This is what we have in mind.
Yeah.
It's for both Atos, just before spin-off, and at the time when we make the spin-off, because as Rodolphe explained, at the time of the spin-off, all the debt will go to SpinCo, and most of the OMDA pre-IFRS 16 will be with SpinCo. More the global credit metrics will transfer to Atos with SpinCo.
Yeah. Thank you for taking my question. Derric Marcon, Société Générale. I've got three, if I may. The first one, have you asked for a waiver for your debt position at the end of June? How have you renegotiated that with banks if you had such a discussion with them? Follow-up on that question, would you obtain the financing you want to obtain if Standard & Poor's your rating in the coming months? That's my first question. The second question is about the competition that will exist between the two new companies.
Because I thought that in the past, the vision of Atos was that it was important for customer to have an end-to-end service provider capable to manage IT infrastructure plus application modernization, especially in this trend to cloud platform. Here, it seems to me that separating the two companies makes this end-to-end approach a little bit more difficult than in the past. My third question is regarding the-
It's the fourth question.
Third.
Third, okay.
The first one was a follow-up.
If we combine the two first one.
Yeah. Yeah, exactly.
If we combine the 3 first 1, it's the second question.
Agreed. The last one is about the target of free cash flow to OMDA conversion. 75%, if I remember well, 80%.
Absolutely, yeah.
Target by 2026 versus 30% in 2021. I'm just wondering here, where are the potential upside, what happened in 2021, and why the ambition is so high, because 75%-80% is, you know, the level that we see usually for software companies, not IT services company.
Well, it's a lot of questions. Hopefully, I'm not forgetting any of those. On the question on why are we changing our view and why do we think that dividing the company into two would create more value than trying to maximize the synergy by adding what you call, what we don't call end-to-end solutions for our customers. Well, of course, we're not going to comment on the past and the strategy that has been followed in the past in this company.
If you look at the performance of Atos, and if you compare to the industry norms and to our peers, which have different strategies, much more focused on some segments on the wide IT market, seems like most of the time, focusing is, well, much more value generative, much more enables to derive performance metric, which are much more solid and also better reflects into a solid stock price valuation. Second element, we think that by having a very large portfolio of products, a very large portfolio of assets, a very wide company consisting of business which have different dynamics, we have tended to adopt a sort of one size fits all, which actually didn't enable us to maximize the value of all the assets.
Tech Foundations, it's a cost streamlining strategy that we should have to make sure that we adapt the cost base to the evolution of the revenues, which is, as Nourdine Bihmane presented very well, shrinking. That's the name of the game. The rest of the business is a growing business. We have to invest in new talents, in R&D, in bolt-on acquisitions. It's totally different philosophy, metrics, market dynamics. What we thought is that, well, having this comprehensive end-to-end portfolio, first didn't derive into a superior performance in the marketplace, it's evident. Second, didn't really enable us to focus on the key and the distinct strategies of our assets.
We have to be also straightforward on this one, that didn't really translate into a high-performing valuation for our stock. There is a last point that we have not talked a lot today. We think that by trying to focus on generating synergy across the wide portfolio of our product, we have ignored a little bit the core of what should be our attention, this, which is the synergy between digital and BDS. That's a very important point, a key structuring argument for the creation of SpinCo. Why? There is one fundamental strategic element, well, in terms of technology strategy for tomorrow, which is the secure cloud. Secure cloud means, in essence, bringing together cybersecurity of BDS and cloud of digital.
That's a very important element, and we have to focus on that element of synergy, which we think will enable us to differentiate ourselves vis-à-vis competitors and to maximize our growth. An important point, in the plans you have seen today for Eviden, for SpinCo, there is no upside for this synergy. It's an add-on. There is lots of opportunity, there is a lot of hope, but in the base conservative plan that you've seen today, those elements of additions are not included. I've forgotten the rest of your question, sorry.
Maybe.
The waiver at the end of June.
Oh, the waiver. Well, anyway, I forgot this one because I don't really understand it.
Maybe I-
If at the end of June you are above 2.5 x leverage.
Oh, because, well.
You've got some covenants.
Well, I'll just give the answer simply from my point of view. I've said what will be our best view, our best estimate of the OM trajectory of the group. I've said that we have narrowed down the guidance bracket. If you translate that into figures, you see that we are below the 2.5 x figure that you have mentioned, and that's why I didn't really understand your question, because for me, we didn't have to get any form of waiver in this domain because we stand where we think where we said we would be standing, which is below the threshold of 2.5 x. Yeah, but it's now.
We don't test the covenant at the end of June. It's just once.
Of the year.
At the year-end. Which makes sense with the seasonality effect that we might have through each year. As explained by Rodolphe, if you compute the figures taking into consideration what we've just done with the sale of the Worldline shares, and then adjusting a little bit the outlook as Rodolphe did for the operating margin on the lower half of our guidance. If you compute all that with preliminary expenses of our, you know, the early-stage expenses of our transformation plan, we should remain just slightly below 2.5% at the year-end. We'll see, because there might be some unpredictable events, but this is the current outlook we have.
This will not prevent us, as I explained, from consolidating our financing plan, having discussion with the banks, because we know that our company, Atos, is going to be more leveraged due to this significant transformation plan we have, but in order to deliver performance in the long term. 75%-80% cash conversion first. There was a footnote on the slide disclosing that this is on the OMDA pre-IFRS 16. Meaning that out of the, you know, we in the OMDA deduct the lease expenses, okay? Making the OMDA a little bit lower. If we were to compute this cash conversion based on OMDA, that would be 60%.
Seventy-five to eighty percent based on our analysis is not so far from the industry metrics, not so far from the benchmark. Regarding 2021, because part of your question was about the low conversion rate in 2021, this is due to some specificities in working capital variances. You have to know that as part of SpinCo, there will be over time, although we have, you know, everything is going to be on average, that would remain the same, but we might have some hits in some of the years because the BDS business might give rise to some unpredictable variances in working capital due to the big high-performance computer contract that we have.
For which there are some installment payments which might come on one year or the other year. We have these kind of things which happen in 2021, some specificities in working capital variances explaining the low cash conversion in this year.
Hello, it's Laurent Daure, Kepler Cheuvreux. I also have a couple of questions. The first is, you have not touched on UCC today. It's deconsolidated on the balance sheet, but it's not part of the disposals you talked about this morning. So could you update us on that? Second quick point is, can you share a brief word on the seasonality of profit this year? The third is on the talent management. Around the spin-off, anything specific have been already designed for the staff? My final question is on the balance sheet.
I understand the moving parts, it's quite complex. By the end of 2023, in terms of net debt, what kind of numbers should we look after? Is it EUR 2 billion+, or I'm completely wrong on that? Starting at EUR 1.2, I think, including the disposals, by the way.
Well, I will try to answer your question. It would be very much easier if you ask one question at a time, because it's easier for us, because I cannot take note. On the UCC disposal, when this is an asset which has been held for sale for quite a long time, we have engaged discussions with a potential buyer, which are progressing slowly but regularly, meaning that we continue to see that asset as an asset held for sale. I guess there is no more news that we can share on this one. Diane, or at least, unless you want to add on this subject 'cause it's your.
Yeah. No, just to say that, yes, this is ongoing and we will proceed to the extent it creates value for our group.
Mm-hmm.
It is underway.
Yeah. Slow progress, but no more details at this. Oh, seasonality, I guess you meant what's the trajectory of our operating margin across year 2022? I guess that's what you meant. As we have said earlier and as we said when we gave our guidance at the beginning of this year, this year will be back and loaded. Why? Because we had to put in place many elements, many decisions to strengthen, to improve, to stage change the company performance in many respects. We have started with the new organization and taken measures to restore the commercial momentum.
As you've seen through the Q1 figures, this has already started to produce fruit, and probably more of that into Q2. When it comes to OM, we have developed plans that we are going to engage, and we have engaged already, which are going to, by definition, because it takes a bit longer, they're going to bear fruit in the second half of the year, meaning that what you should expect, even though we have maintained our operating margin guidance, we have a bit narrowed it down, but we have confirmed it. First half will be much lower than the second half. We are now materializing the operating margin improvement plans which.
This is starting now. Plus we add also to absorb the inflation impact on our salary costs, which are quite a substantial part of our cost base.
Regarding your question and your calculation on net debt, you did it pretty well. I mean, EUR 2 million plus, I would not say plus, around EUR 2 million, roughly EUR 2 million. This is, you know, the current outlook we have on the net debt at the spin-off debt. I know it's quite easy to make because you've gone through the slide. EUR 1.4 billion cash outflows, EUR 700 million proceeds from disposal, so you have the net of the two. Then all the rest were our debt maturing, which has no impact on the net debt. Then we have some remaining expenses, you know, related to the question that was raised on taxes.
The taxes will come maybe more after the spin-off than before and some transaction costs, but which are partly offset with the sale of a portion of the SpinCo shares held by TFCo.
The last question was on talent management.
Talent.
Talent management, well, during, I guess, the separation phase and how do we manage to retain our key talents, which is very instrumental in our sector. As you know, we are in a talent-based business, and each of our 111,000 employees, they produce the value of this company. Well, we are very attentive to that, and we have put in place quite a very determined plan to make sure that we don't suffer from any issue deriving from an uptick in attrition. Maybe I should start saying that our attrition rate is one of the best one in the industry, in our sector.
I mean, we are 3 percentage points below our competitors, mostly because we give lots of focus to this subject. Second, we have made sure that we have developed retention packages for all of our key leaders to make sure that they are still motivated and in line with the value creation drivers of the company during this transformation phase. Lastly, I'm not going to enter into the detail, but the separation program has been conceived with a view exactly of minimizing or suppressing any negative impact on our organization. It means that reducing the uncertainty for them, everybody should know immediately.
Immediately means tomorrow in which part of the company they will land, if I may say so, when the separation is approved. Second, making sure that there is no internal fights, which are the two main pitfalls in any carve-out, specifically of that dimension, which is quite significant. We have developed a plan, very pragmatic, under those two lines with those two objectives. Meaning that tomorrow, literally, everybody in the company will know for sure in which part of the company they land when we get all the approvals before the completion of the separation, yet we minimize, to say the least, the pile of uncertainty for everybody because it will be one day only of uncertainty.
Just a couple of follow-ups from me, Rodolphe. I mean, you gave a great example of the synergies of the two businesses there in talking about secure cloud, and your predecessor made it clear that you didn't wanna IPO the big data business 'cause whatever happens, the outsourcing business needs those security services. You're gonna be two companies, two boards, two shareholders groups at the end of this process. There's no obligation to work together. You have to sort of stand on your own two feet. So surely those synergies get lost, and that's why, you know, the strategy is raising some questions today. I've got a couple more, but I.
This is a good question. Well, as I said before, it's not proper to comment on the strategy of the past, of the business strategy, I mean, of the past. What I can say is that, first of all, and maybe Diane will help me on this one, we are developing plans to make sure that the two companies, Tech Foundations, on the one hand and SpinCo on the other hand, will continue to work together, in that we are building intercompany agreements to make sure that they continue to work together. Second element, to say the least, we cannot say that. Well, the synergy between those two blocks have been substantial and have derived into a very strong performance for our company.
Of course, we want to continue to work together. We want to continue to extract those synergies, and we are building intercompany agreements to continue on that path. I'm not going to be more precise on that. The synergies between those two parts and those two entities and today are relatively limited.
Just on the cash flow, looking at the technology solutions business, you're guiding for EUR 150 in 2026. It looks like the delta of OMDA is about 3 points. There's gonna be interest and tax below that. Is the business gonna be generating cash flow in the traditional sense after CapEx, interest, tax, and lease expense? And you're expecting that business to have 2.5x net debt to EBITDA.
Sorry, you said EUR 150 million cash flow, which is for TFCo, not for SpinCo.
Sorry.
It's a TFCo, yeah.
Yeah.
You're on TFCo. TFCo, which will basically have no net debt at inception. We can expect that, as time goes on, you know, that this company will pay significant tax. But at the beginning, we will be able to rely on the very significant tax losses that are carried forward. We are going to see. It's too early to have a clear view on how these tax losses will be split into the two groups and if we can keep them, but we will do our best in order to keep them.
It's likely that the tax burden will be low on Tech Foundations, as well as there will be very limited interest expense as the net debt of this company will be close to zero at inception.
Okay. Just finally on the litigation, I mean, that's a sizable potential cash outflow. How are you factoring that into your forecasts or, you know, provision, you know, potential for that to arise? The case that I'm talking about.
We made our own assumption on this, for sure. We factored in regarding all the reserve for contingency that we have in our balance sheet. We factored the cash out, the potential cash out related to these things in our financial plans. There might be some good or bad news, you know, upside or downside, but we consider that what we did and the weighted view that we took on all these litigations or reserve for contingencies is sufficiently prudent.
When you showed that big EUR 2.8 billion, I think, of cash, it's somewhere in there, potentially.
No, it's part of the cash outflows.
Yeah.
Of the EUR 1.4, it's all included in there. We draw your attention to a few specific items, and then there is a remaining part which was close to zero, balanced with the cash generated by our business, but also utilization of such cash for some contingencies and so on.
The size, yes, it's taken into consideration in our current cash outflow assumptions. Our own assumptions of the cash outflow related to those, litigations.
Okay, this is the end of the Q&A session. We have a lunch now in the lobby where you can continue discussion with management. Thank you very much.
Thank you very much, and thank you for having shared with us this very important moment in the life of our company. Thank you very much.