Good day and thank you for standing by. Welcome to the Atos Group First Half 2025 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Philippe Salle, Chairman and CEO of Atos Group. Please go ahead.
Okay. Good morning, everybody. This is Philippe Salle. I'm in the room with Jacques-François. Let's start the presentation. I will do the business highlights and the operating performance. Jacques-François will then talk about the financial results, and we will wrap up with the outlook. If we start on the first topic, first, the H1 performance is in line. We are very, I would say, pleased with the results that we have announced this morning. We reiterate the guidance of 2025, the guidance that we have given on the CMD in May. Second, on the right, you have the Genesis Plan. It's in force, all the seven pillars. In fact, already three pillars have been completed. We are, I would say, well engaged on the restructuring plan that we have, of course, launched in the beginning of this year.
We estimate that we are, versus the restructuring, at half of, I would say, the journey, and we will be probably at two-thirds by the end of the year. Third point, we have signed with the French state yesterday night. During the night, in fact, the SPA for the French Advanced Computing. Remember that we had a press release on June 2 saying that we have been able, I would say, to renegotiate the deal because we have changed the perimeter. We confirm exactly what we have announced on June 2. We are entering, I would say, in the phase of the carve-out of the business, and the closing will happen probably in Q2 2026, between March and June, so end of Q1 or in the course of Q2.
The last point, we strengthened the governance with board members, with a new board member, in fact, that joined the company in June. We have done also the reverse split, according, really, I would say, to the AGM of January where we announced, I would say, that we will launch this in the course of Q2, in fact, 2025. Key figures, so revenues around EUR 4 billion plus. The good news for me is that we are stabilizing, I would say, the revenues at roughly EUR 2 billion per quarter. The operating margin is EUR 113 million, which is roughly 3% of revenues, 2.8% to be very precise. I would say it's a 15% organic growth versus last year, which I think is quite a performance given, of course, the slide of the revenues. Order entry is EUR 3.3 billion, so it's improving.
We are restarting, I would say, to chase, of course, new deals, and it will continue, I would say, to increase in the course of the year. For information, last year, it was at 73%. The free cash flow, we have said already, is around -EUR 96 million. The net debt, EUR 1.7 billion. The liquidity, and we have advertised it, in fact, in the course of July at EUR 1.8 billion. If we look at the book-to-bill ratio, as you can see, in fact, we have taken quite a hit, in fact, in Q2 and Q3 last year. This translates, I would say, to loss of contracts in H2 last year. We have the effect in H1 this year. As you can see, it's improving, and we are, I would say, quite confident that it will now increase in the coming quarters.
We have put some examples, in fact, below on the major contracts or wins or renewals that we had in Q2. If we go to Genesis, this is the seventh pillar I have shown, in fact, in May. The growth is down. We have, I would say, reorganized completely, I would say, the growth. Excuse me. I'm back. I would say the gross organization industry has been selected. The bid excellence has been reviewed. The only thing, of course, that we have not touched is the middle. HR is done. Country reviews, we have started, I would say, to launch this process. It's an acceleration, in fact, in H2, and I would say next year. We'll probably, I would say, exit probably 10 countries plus probably in the course of the second semester this year, and we'll continue next year.
Portfolio review is done also with the business side of first, the contract review, so what we call the red and black contracts and the practice turnaround. The gross margin and, of course, the cost review, this is, of course, a journey that we have in the course of 2025 and 2026. The billability rate, in fact, has increased. The pre-sales is completely done. The project margin announcement, it's the move to offshore, is in course. It's a journey also. It will take some time. Delivery excellence, and indeed, that's the only topic that we haven't touched, but the CTO, who is joining the company on September 1, we launch, of course, this project. Cost review, everything is under review. I would say we have done all, I would say, we have identified, I would say, all the savings. Then the cash, DSO, and DPO is in force. It's a journey also for the next probably two or three years. The DPO probably, we will finish by 2025, 2026, and DSO for me, it's a two-three-year project. Securitization, we will not do anything this year. CapEx has been reviewed and tax management with a new tax manager. In fact, there is a lot of things in course.
Now, if I just zoom on some projects, as I say, on growth, this pillar is down. We have a new operating model. We have also reviewed, I would say, the backbone of our sales. I don't know if I have said that, but we have what we call CEPs, so Client Executive Partners, around 300 of them. Roughly one-third will be probably changed in the course of H1. Some of them have been replaced already, and probably in the course of H2. The idea for us is to have, I would say, the full team by the end of the year. We expect, of course, then to, I would say, to see an increase, I would say, in the pipeline, of course, and in the deals in H2 and next year.
Portfolio review, as I say, we have already exited one country, but it will accelerate for sure. The low-margin contracts, we are now back to only three contracts and probably two next year. We are trying, I would say, probably to exit these two by 2026 or 2027. Of course, it will depend on the negotiations that we have with the customer. Delivery on SG&A, as I say, the billability rate now is at 79%. We are above 79%. Plus 3% versus the end of 2024. The offshoring rate, remember that we are targeting around 65%. We have gained roughly one point.
The cost base of the G&A is reduced, I would say, by 10%. As I say, overall, I would say the envelope of Genesis has been, we are roughly at 50% of the envelope. Of course, some exits have been done at the end of H1 this year. It will accelerate, in fact, in H2 in some countries because we have negotiated, I would say, with the unions the exit. As I say, we will be probably between 60% and 70% of the plan by the end of the year. If I look at the operating performance by segment now, just as a reminder, what was the revenues last year and this year? Remember that we have a scope, which is Worldgrid , and foreign exchange, which is mainly, I would say, the U.S., U.S. euro, or dollar.
As you can see, we are roughly at EUR 2 billion, around EUR 2 billion, I would say, per quarter, stabilizing, I would say, the revenues and minus 17% versus last year for the first semester. In terms of, I would say, the revenue by regional business unit, as you can see, in blue, you have Atos, and in orange, you have Eviden. Atos, in fact, the severe hits we had, in fact, was U.S. and UK. We are, I would say, the customer. We are more, let's say, frightened on the situation of Atos in the course of 2023 and 2024. To a lesser extent, in fact, in Europe, for Benelux, Germany, and France. As you can see on the right, the number one country right now, given the new exchange rate, is Germany, around 19% of the turnover, the revenues of the company for H1.
You have the U.S., 17%, France, and the U.K. around 15%, also international market. Benelux and Nordics and Eviden are around 10%. If I look at the operating margins, we have quite a good news. We are roughly flattish versus last year. If you take into account, I would say, the scope with Worldgrid and the exchange rate, we have, in fact, increased the operating margin by 15%. If we go deeper, I would say, by business unit and SBU, the good news is that Atos is around 6% already. For the first time, Germany is positive in H1. There will be much more to come with the restructuring plan that is in force that will, in fact, start in H2 this year and will be completed, in fact, in H1 next year.
USA and Canada, 10%, and I will come back. France is 2%, which is also still low, and there will be more to come also with restructuring. U.K. and Ireland around 9%, international market 8%, and Benelux is 6%. What is very important is also to understand that we have a seasonality for the SBU of Eviden. Eviden is negative in the first half and will be strongly positive in H2. Overall, I would say Eviden, of course, will be positive for the fiscal year of 2025. If I deep dive, let's say, geo by geo on Atos, remember that Atos is service and Eviden is hardware and software. Germany first, the biggest country, as you can see, minus 8% in terms of organic growth.
We have been able, I would say, to resign a very big contract, in fact, with one of the OEM in the automotive sector and with a positive margin because it was a contract that was losing money. As I said, the operating margin now is positive. Of course, it's quite, I would say, close to zero, but it will be strongly, in fact, impacted by the restructuring positively, of course, for 2026. We are definitely seeing that in 2026, we will have a very tough, a very steep, in fact, increase in profitability, and we will be probably back at 5% plus in terms of margin.
If I go to the next one, the U.S. and Canada, this is, of course, one of the regions where we have been hit, I would say, severely in terms of contracts that went down because, of course, as you can imagine, in the Anglo-Saxon world, let's say the risk department probably is stronger than, I would say, the case in continental Europe or in other countries. Probably, I would say, some of our customers were a little bit frightened. We have been, of course, also hit by the competition. We have, let's say, used, I would say, the weakness of Atos last year to try to steal some business. Not the case, of course, in H2 this year. For sure, it was an opportunity for the competition, I would say, to try to, I would say, to arm us a little bit.
We have been able, I would say, to, of course, shave costs very rapidly. The margin is increasing. Of course, it's a decrease in terms of quantum because, as you can imagine, the decrease of turnover is too strong, I would say, to have a profitability that can stay, I would say, at the level of last year. Now, next, France also hit roughly of minus 11%. Also, we had a very slow start of this year in the public sector that is very strong in France. Remember that it hit, in fact, all of our competition. Remember since that in France, there were no budgets for some time. It was not possible for our public, I would say, customers to spend or to launch new projects, and that's why there is a delay. We definitely think that there will be much more opportunities, in fact, in H2.
The good news is that we have been able to increase, I would say, the operating margin. It's still too low, for sure, at 2%. It's much better than last year, given the fact that we have also lost some contracts. If I go now to U.K., same thing. We have been able to stabilize, I would say, the operating margin in euro. In fact, in terms of percentage, as you can see, we increased it roughly by three points. Still decrease also, like in the U.S., for the same reason. Also, remember that in the U.K., that's where the BPO contracts are there. We have, of course, closed some of them. There are only two remaining. We want to close, of course, both of them in the course of 2026, 2027.
I already said, in fact, that there is one that is going to be terminated, in fact, in the course of next year, normally 2026 or 2027. The second one is a much longer contract. We are in negotiations, I would say, to stop this contract. Now, last, international markets. Also, quite, I would say, some decrease. Remember that in the international markets, you have Latin America, Africa, Eastern Europe, and Asia. We have also MEV and the major events business unit. Of course, with the Olympics, with a strong turnover that was last year, there is an impact. We have also a strong impact, in fact, in Switzerland also, where some clients have decided, I would say, to stop some contracts. However, as you can see, we have been able to manage the margin at EUR 46 million, roughly 8%.
We are quite, I would say, pleased with the Genesis, I would say, actions that we have taken in this region. Last, Benelux and Nordics, also an impact. Less probably, I would say, than the rest of the, let's say, the other regions, around minus 5%. Same thing, I would say, with the public sector that was impacted also, I would say, in the beginning of this year. The good news, as you have seen, is that we have done a lot of restructuring in this region, mainly in Benelux, in fact, in Belgium and Netherlands. We have also signed new contracts that are in force, in fact, in Q2. We are quite confident, I would say, for the rest of the year. With this, I give the floor to Jacques-François to review the cleanup. Sorry, I have Eviden. Sorry. I went a little bit too fast.
Eviden, remember, this is the hardware and software. Again, this has, I think we said that, but I would say this year is a very particular year with the JUPITER project and the Exascale that we have sold to Germany. Remember also that we are also in the process of selling another Exascale, in fact, for France next year. In fact, with the, I would say, the pattern of the delivery, most of the revenues and the margin will be in H2 between, let's say, September and December. As I say, we had minus EUR 33 million. We're flattish versus last year. In fact, the H2 will be, of course, very strong. The profitability will come back on a yearly basis for Eviden. Jacques-François, it's yours.
Thank you, Philippe. Good morning, everyone. Now that Philippe has gone through the drivers of the business operational performance, let me review the P&L items below the operating as well as the cash flow statement and the balance sheet. Let's start with the P&L. As Philippe has indicated, our operating margin amounted to EUR 113 million in H1 2025. We incurred reorganization and rationalization charges for EUR 379 million in total, of which EUR 355 million reorganization costs, as we have made significant progress in the execution of our restructuring program, and EUR 24 million provision related to real estate leases. We did not impair any goodwill this semester, contrary to last year when we booked a EUR 1.6 billion non-cash charge. Other items reached a negative EUR 174 million. They include litigation provisions for EUR 107 million and asset impairment of EUR 35 million.
The net cost of our debt reached EUR 162 million, up from EUR 73 million last year, reflecting our new debt structure and including peak interest, non-cash interest, as well as the amortization of the 2024 fair value adjustment of the debt according to IFRS 9. Other financial expenses were EUR 40 million in the half due to debt leave and pensions. As a result, our net income group share amounted to minus EUR 696 million. Moving on to the cash flow statement. Free cash flow generation improved significantly year on year from minus EUR 593 million to minus EUR 96 million in H1 2025. We generated EUR 309 million OMDA in the first six months and expensed EUR 93 million in CapEx and EUR 122 million in leases. Our change in working capital requirements, once we neutralized for the working capital action, was positive of EUR 167 million.
You might recall that these working capital actions I'm referring to are the cash that we received in advance from some customers at the end of 2024, and these customers were mainly from the public sector. This positive EUR 167 million comes mainly from the lower revenue and therefore lower associated trade receivables. Due to timing effect, our cash restructuring expense was only, if I can say so, only EUR 154 million. It is expected to accelerate in the second half of the year. Tax paid was EUR 13 million, mainly due to one-off credits in the half and cash cost of debt EUR 80 million. Other items amounted to EUR 109 million. They included litigation settlements and onerous contracts cash out. As a result, our free cash outflow was limited to EUR 96 million.
Turning now to the net debt bridge. At June 30, 2025, net debt was EUR 1,681 million compared to EUR 1,238 million as of December 31, 2024. Beyond free cash flow, it reflected the impact of the change in working capital actions for EUR 176 million, negative forex impact for EUR 112 million, and other elements such as peak. Another way to look at net debt is to start with cash and cash equivalent for EUR 1.4 billion, which I deduct from the gross debt for a nominal value of EUR 3.1 billion. We end up again with a net debt close to EUR 1.7 billion. This is excluding the IFRS 9 fair value adjustment. As a result, leverage ratio increased to 4.0x during the period. I remind you that our target is to reduce leverage below 1.5x at the end of 2028.
Before handing back over to Philippe for the outlook, I would like to clarify for you the impact of forex during the semester. Whilst we have a degree of natural transactional hedging, we are exposed to currency translation. In the half, 17% of our revenues were USD denominated, hence the impact on reported aggregates. We also had a significant portion of our cash position in USD, which resulted in a negative impact on our net debt in euros. The euro to USD conversion rate evolution also affected our equity position, which led, when we add it to our negative net results, to a negative equity position in consolidated of minus EUR 90 million at the end of June. You should be aware that currently we are under constraints, which prevent from systematically hedging our transactional risk.
However, with the ongoing normalization of our financial situation, we will increasingly be in a position to actively manage our currency exposure. Thank you all for your attention. I will now hand back to Philippe.
Thank you, Jacques-François. On the outlook, as I say, first, we confirm, of course, the 2025 guidance that we have given in May. The EUR 8.5 billion revenues, remember that it is, of course, on the FX at the end of 2024. The FX would have an impact around EUR 100 million. The cost, the operating margin at 4%, and I think we can touch the 4% this year. The cash will be at EUR 300 million and maximum, let's say, EUR 350 million. We'll try to do more, of course, so it's possible that we have some good news. For 2026, I just want to reiterate what we have said in May. There is nothing new. We should rebound in terms of top line, positive organic growth.
We should be also cash positive in terms of free cash, of course, before debt repayment and any M&A that we probably restart in H2 next year. For 2028, I would say we continue to estimate that we will have a top line growth around 5% to 7%. It will be less, of course, next year because we are recovering. I definitely think it will accelerate, in fact, in 2027 and 2028. We are still looking at a 10% operating margin. Of course, deleveraging, I would say, the balance sheet starting, in fact, in 2026 next year, and continuing in 2027 and 2028 with, I would say, a net debt to EBITDA below 1.5x . With this, we can turn to the Q&A session and we are ready to take any questions.
Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *1 and 1 again. Please stand by while we compile the Q&A roster. We will now take the first question from the line of Frédéric Boulan from Bank of America. Please go ahead.
Hi. Good morning. Thanks for taking the question, Fréd , at Bank of America. Firstly, a question on the top line. If you can discuss any thoughts around the trajectory for the rest of the year. Was Q2 as you expected? Any specific assumptions for the rest of the year in terms of demand and sales cycle? Any impacts from the seasonality in Q3, Q4? I think we had the Olympics last year in Q3. Firstly, on revenue. Second question on the free cash flow. In your liquidity update, you had, I think, EUR373 million negative cash flow in H1 if we include working cap actions and FX versus the kind of EUR 96 million adjusted number this morning.
If you can discuss for the rest of the year beyond the EUR 350 million kind of adjusted number, any other impact around working cap and FX we should expect, assuming the FX stays where it is? Lastly, on the cost, and maybe within that, a follow-up on the cost-cutting plan, you're saying two-thirds will be done by the end of the year. What does it mean in terms of restructuring cash out for the second half? Thank you very much.
Okay. On the top line, I would say we are, first, the Q2 was on expectations and there was no surprise for us. As I say, we are stabilizing, in fact, the turnover and the revenues around the EUR 2 billion. In Q3, we estimate that we will again be around this EUR 2 billion, a little bit less, but I would say continuing, and it will start to increase in Q4. I would say it's a stabilization for the first three quarters, and I would say an increase, in fact, in Q4. We continue to see a stable basis, which I think is very important. In fact, we didn't lose that many contracts in H2, probably only one. One that's a big size. It's normal, of course, that we cannot renew 100% of the contracts. Most, more than 90% of the contracts have been renewed. I think it's quite good news.
I have toured already more of the, because I have decided to meet with the top 100 clients. I have met probably 40 of them. Definitely, I think that the trust has come back. Some of them are reopening the tenders because for some of our customers, it was blocked. I think it's good news because we're going to have more tenders to answer. In fact, the pipe is increasing for H2. For the cash flow, probably I will give the floor to Jacques-François.
Yes. Hello, Fréd . Yes, a couple of elements to answer your question. First of all, it's the bridge between the EUR 373 million and the minus EUR 96 million. I think it's clear for you and for everybody that on one hand, the working capital normalization for the cash in advance, which we received at the end of the year. Because we received at the end of December EUR 319 million and at the end of June, much less than that, there is an impact, which if you want to look at the underlying performance, working capital, etc., we need to neutralize. That's an impact of EUR 176 million to neutralize. The second element, indeed, is the FX. The second part is looking forward for the rest of the year. On FX, I cannot comment because, you know, by definition, it's a bit difficult to predict.
The only thing I can say on FX is that we constantly look at ways to mitigate our risk and to repatriate cash through dividend distribution, through capital reduction, or whatever. Already in H2, we have taken some steps, let's say, to significantly reduce our exposure on the debt side, on the cash and debt side. Regarding working capital, my expectation is that at the end of the year, we should be in the same ballpark in terms of cash in advance compared to last year, which will make a more natural normalization, if that's clear for you.
Fréd , just for information, we don't do working capital actions. I just want to make sure that we receive advance payment in clients, but we don't ask for them and we don't give rebates. It's very important, and that's a big change for the company. On the DPO and the suppliers, we don't stop paying suppliers. It has been paid accordingly, I would say, to the contract terms. In fact, if you look at the balance sheet that you have in the press release, you can see also that on the supplier side, so the liability, in fact, it has decreased. The amount has decreased, which is in line, of course, with the decrease of the turnover.
Sorry, Jacques-François, just to clarify on your commentary. You're saying the EUR 319 million advance payment, that's going to be zero at the end of the year?
No, not necessarily. Unfortunately, I would love because I would say I don't want this. We cannot stop some public, I would say, customers to pay in advance. We will probably have again payments in advance by the end of the year. Of course, we will advertise them because we want to be very, I would say, transparent.
Yes. My comment was more that without doing anything, I expect that we will be in the same ballpark, even if we are not organizing, provoking, desiring to have that. By the nature of the business and our exposure to the public sector in particular and some habits which have been there for many, many years, we have plenty of customers who are used to that. In terms of their way to manage their budgets and you know how it goes when it's decided by whatever, their parliament or things like that, they have a vested interest in paying us before the end of the year. In my assumption, I would not be surprised if at the end of the year, we are around the EUR 300 million mark for the cash in advance.
On your question on restructuring, Frédéric , Genesis is accelerating. We will have more cash out, I would say, but it will be spread between H2 this year and probably H1 2026. I definitely think that most of the restructuring will be done by the summer of 2026. Genesis restructuring will be almost complete. There will still be some countries continuing because it takes more time in H2 2026 and H1 2027. I would say the ballpark will be between H2 this year and H1 next year.
If I can add on this point as well, you have seen or you're currently looking at the cash out in H1 related to restructuring exit of people amounted to EUR 149 million, whereas the P&L charge amounted to EUR 355 million. There is a lot which has been signed and agreed. Just the implementation will come in the next month, as Philippe was just explaining.
Perfect. Thank you, Philippe. Thank you, Jacques-François.
Okay. Thank you.
We will now take the next question from the line of Nicolas David from ODDO BHF. Please go ahead.
Yes. Good morning. Thank you for taking my question. First, I would like to come back on the commercial activity and revenue trends. Do you expect a significant improvement of your book-to-bill in H2? If yes, do you think that you can get really closer to 100% quite soon? Looking at the trajectory for Q4 and for next year, could you please clarify the fact that in Q4, you expect a stabilization year on year, still like you discussed with the CMD, or it's more a quarter on quarter stabilization, Q4 versus Q3? For next year, given that you're probably ending the year with a book-to-bill which will be way lower than 100%, what gives you so much confidence that you can have an organic growth?
If you were to decline again next year in organic terms, what kind of decline could you absorb without needing more restructuring to get your ambition, to get to your ambition of margin improvement? Thank you very much.
I would say the pattern of revenues for this year, as I say, we expect Q3 to be around $2 billion, $2 billion minus. Last year, I think we were $2.3 billion, so it's minus EUR 15 million, EUR 16 million. We are still, I would say, in the same pattern in terms of organic decrease. It will change in Q4 because we will be probably at zero plus. The book-to-bill will increase, yes. We will be above 80%. Are we going to be close to 100%? The goal is to be roughly at 100% in Q4, but I would say on the year-to-date, probably a little bit low. We will close, I would say, between 90% and 100% at the end of this year.
Remember that the book-to-bill also, it's not, I would say, a precise measure of the organic growth of next year because it depends if it is, I would say, long-term contracts or short-term contracts. That's why I think we need to, it is not an easy reading, I would say, from the book-to-bill, unfortunately, to derive, I would say, the organic growth for next year. I will come back to you because I think we'll give probably a better measure in the course of next year so that you have a better reading, I would say, to translate the book-to-bill into our revenues. It's not an easy reading, in fact. I would say we have the pipeline, in fact, is increasing, which I think is very good news.
Definitely, we think that we're going to strike new deals in the course of H2 that will, of course, give revenues for next year. Now, I don't expect any decrease in top line next year, but as you say, if it happens, I don't think it's a big deal for us because the restructuring that we have is quite heavy, in fact. The operating margin will strongly increase, in fact, in the course of 2026, whatever is the top line. If we have more top line, of course, it will accelerate even more. If we don't have, I would say, we will still have, I would say, a very sharp increase in terms of profitability. The question, of course, then it's a question for me, but I would say I will not take this decision because I'm quite confident on the top line for next year.
If it happens that it is weaker than expected, I think we can, of course, continue probably to shave some costs. There is no problem for us. Remember that the way we are shaving costs is four different buckets. The first one is the billability rate. We have 79% now. We will be probably at 80% plus in Q3. We will continue, I would say, to touch the 85%, which is the target. We estimate that we can touch this target by the end of 2026. 85 is the right level, whatever is the revenue. Unfortunately, this does not change anything. The second one, of course, is the G&A to SG&A. We will reduce heavily, and we have some measures we can continue.
We are doing a lot of things, in fact, in IT, in real estate, in different measures. For example, we have reduced the number of cars, etc., in different countries. If we need to accelerate or, let's say, do more, I think it's still possible for us. There is no problem for that. The third one is the move to offshore. I definitely think that we have also gained one point. Remember, one point is roughly 0.4% of margin. If I see that we are weakening the top line next year, we can accelerate the move to offshore and probably have two or three points. We will protect the margin for sure. The margin, in fact, of 4% this year will be much higher next year, whatever is the top line. Then, of course, we have what we call the non-personnel costs, where we touch in the G&A. In SG&A, in fact, it's the personnel costs, the non-personnel costs where there are a lot of initiatives.
I will accelerate the NPC by September. There are a lot of things that we're going to start reviewing after the summer.
Very clear. Thank you. In terms of book-to-bill, is it fair to say that in your H1 book-to-bill, the average length of contract is probably lower, shorter than what the company was used to book before you were there when the H1 book-to-bill was more than 100% historically?
I'm not sure of this, unfortunately. We can come back to you on this comment, but no, I don't think so. I'm not sure it's shorter. In fact, after that, you know, that's why we need to segment the book-to-bill. That's why, in fact, we need to put more, I would say, I don't know if it's clarity or whatever, but I would say more, let's say, transparency. It's not a transparency, but remember that in the book-to-bill, so in the contracts that we see assigned, there are, for me, two kinds of contracts, what we call managed services. Usually, it's contracts around three to five years. I would say the rest, which is roughly the digital, the smart platforms, AI, cyber, usually data contracts of less than one year or one year plus. It depends. Sometimes in cyber, we have three or four years contracts.
I would say we will segment probably the portfolio between, let's say, long-term contracts over one year and, let's say, shorter contracts below one year. I don't have, I would say, this number, unfortunately, and that's what I said. We will come back, I would say, to the market probably in the course of 2026 to have a better understanding of the portfolio. After that, the dynamics, of course, are quite different between the two segments. In fact, it's not because you have a book-to-bill of 100% that you're going to go, unfortunately. I think we will give probably, I would say, more comments on this one. I don't think that it has a shorter and I don't think so. I think the contracts that we have resigned, most of them are between three and five years. I don't think so.
I was thinking maybe shorter in terms of ramping up faster and getting into production faster than, or maybe it's possible that the size of contract sometimes.
No worries. I don't know this because I was not there. That's a good comment. We can come back to you on this question.
Perfect. Thank you very much.
Thank you.
Thank you. We will now take the next question from the line of Martin Porta from Amber Capital. Please go ahead.
Hey, good morning. Thank you for taking my question today. I only have one, and it's for you, Philippe. Could you please share with us how much did you invest in the stock, and were there any threshold funding related to these acquisitions? Thank you.
Thank you. I think it's a question I had also on the CMD, but I'm trying to risk because there were a lot of lies on this, unfortunately. I have invested already EUR 9 million. I will invest more in the coming weeks. We will see. Of course, it's on my own funding. Nobody has helped me in any sense. I have never covered also the investments that I have done in, I would say, in Atos. Thank you for the questions. I think it gives clarity because I have seen some comments that I've been helped. It is not really the case. Nobody helped me to fund, I would say, to invest in Atos. Thank you.
Thanks.
Thank you. We will now take the next question from the line of Laurent Daure from Kepler Cheuvreux. Please go ahead.
Yes, thank you. Good morning, gentlemen. I have three questions, in fact. The first one is to check on the second half of the year. If you still have some important contracts to renew or if you think most of the losses are behind you. My second one is on the fourth quarter. You're talking about returning to flat to a bit of growth. I think you have a one-off contract probably in Advanced Computing, which will help in the fourth quarter. I was really interested in the underlying growth, excluding potential one-off in business. Finally, the last one is on cash. The restructuring cash outflow, if we could have some color for the second half of 2025 and maybe 2026, what to expect? Just on cash, not the P&L. Thank you.
Okay. I see for the first question, in terms of renewals, we have one big, we have several big contracts. In fact, I was in the U.S. for more than one week, and we had already, I would say, for the two big contracts that we're going to renew, we have, I would say, a no-roll agreement that it will be the case. I don't expect, in fact, to lose any contracts in the coming semester. For Q4, you are completely right. There is a big uplift, I would say, with Eviden and this HPC contract of JUPITER. Remember last year, I think we were at EUR 2.3 billion in terms of revenues. I think in Q4, a little bit less. There is an impact, which means, yes, probably without this, we will be probably at, I would say, still a slight decrease.
As I said, the underlying is roughly at EUR 2 billion. That's what I look, in fact, I would say, without, of course, the increase we're going to have in Q4. EUR 2 billion per quarter, exactly precise. For the cash outflow, I give the floor to Jacques-François. Remember that we have said that in the CMD, we will spend roughly EUR 700 million. We think we're going to spend probably less than that. I give the pattern in H2 and the 2026 for, Jacques-François.
Yes, Laurent. Thank you, Philippe. Laurent, same answer for my side, elaborating a bit more. The overall project is a EUR 700 million cash out impact. This year in the CMD, we guided saying that this would be between EUR 300 million and EUR 400 million. We want to do that as fast as possible because obviously that generates a big saving and that helps us drive the margin up. We are still in the ballpark of trying to do EUR 400 million. Maybe we'll be a bit shy of that. That's a daily effort from all the teams in all the regions. So far, we can see very, very good progress. Same expectation, no changes versus the CMD. You can assume EUR 400 million for this year.
Roughly EUR 200 million next year. In fact, we said the EUR 700 million was EUR 400 million , EUR 200 million , EUR 100 million. Yes, 2025, 2026, 2027. We estimate that we will probably finish Genesis by the end of 2026, so it's possible that in 2027, there will be no cash out.
Thank you. Maybe just an add-on. I think you were planning to have many meetings with your main client, Siemens. If you could give us a little bit more granularity on how the relationship is reshaping with them. Thank you.
I was in Munich. Yes, I met Siemens frequently. The relationship is very good. We had a very good meeting last time. There is no risk that there is a rundown in the contract. They are reopening also the tender for part of the clients that was blocking some contracts for us because they wanted to have a clear view on the financial trajectory. That's why I spend a lot of time with clients, not just to reassure them that Atos is safe and back. We have a lot of cash. We're not going to burn this cash in the future. We'll be back in a positive territory in terms of cash flow next year. With Siemens, it's typically one of the clients that is reopening. We have a lot of opportunities now coming in H2. I'm very confident, in fact, for 2026 and beyond.
Okay. Great. Thank you.
Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. We will now take the next question from the line of Derric Marcon from Bernstein. Please go ahead.
Good morning, guys. Four questions on my side. The first one is on the order intake. You used to publish, at least last quarter, you did the next 12 months booking. Do you have the figure for Q2? You planned EUR 1.6 billion contracts. What part of that will come through in the next 12 months? The second question is on the renewed contract in the automotive sector you mentioned during the call. Can you help us to understand the economics behind this contract? Compared to what it was before, what has changed in terms of revenue and profit generation? My third question is on the other items. Still a bit more than EUR 100 million in H1. What do you expect for the P&L? I mean, what do you expect for H2 and going forward?
For the other financial expenses booked in the P&L in H1, what is cash and what is non-cash, please? Thank you.
Okay, Derric. For the big contract to resign with a German OEM, in fact, it was a negative. When I entered the company, there were a lot of contracts with negative margin. This is one of them. It's a management contract, in fact. It's quite a sizable contract. It's around EUR 50 million plus per year. The margin was probably on minus 10%, I think. Now we are probably around 10%. It's still low for me, but I would say at least it's not bleeding anymore. Unfortunately, as you can imagine, with what is happening right now, the tariffs in the U.S., the German OEMs, of course, are not in an easy situation. Although I definitely think that the discussion I have with most of them, in fact, they are protecting, of course, expenses in the digital world.
For the first question, yeah, [crosstalk]
it's a very interesting explanation here. In terms of revenue size, is it the same compared to before? How did you achieve to go from minus 10% to plus 10%?
It's a good question. No, but in fact, Derric, what I have done is that for all the negative contracts, I met the client saying that we cannot continue like this. I think that for some of them, they were, I would say, they know that probably we were not at the right pricing. They know also that if we go, I would say, if they go to the competition, they will increase the price. I think it was the, I would say, the responsibility was probably, I would say, more on the Atos side, probably than on the client side. The client is always happy, I would say, if we give a crazy price. Of course, we deliver the service because in terms of delivery, I think we are above the competition in most of the cases.
For this, I would say, for all these customers, in fact, we have been telling them that we cannot continue on the same pattern. I think that for some of them, they realize. For some of them, they are not happy. I would say at least they understand. Yes, there is an increase of the top line because there is an increase of the margin. In fact, there is more revenues, in fact, in the contract. Of course, it will yield to now a positive margin. It's still not yet, I would say, the margin I want because the minimum we set is the benchmark I have given, I would say, to the team for the growth team is to be at 25% plus.
At least we are not bleeding any road. In fact, in terms of what we call, let's say, loss-making contracts, there are only two business process outsourcing contracts now in the U.K. In fact, still, I would say, bleeding. That's why I say we put a lot of energy first to reduce, I would say, the loss and, of course, to stop the contract. We will have probably news during H2. There are a lot of negotiations right now. On your first question, I think we don't have the answer, unfortunately. We'll come back to you for the, I would say, your pipeline. For the questions on the two others, I give the floor to Jacques-François.
Yes. Hello, Derric. Let me take your questions on the detailed line items, one after the other. Starting with the other financial expenses line in the P&L, these are non-cash items. This is mainly debt lease-related and pension-related, so non-cash. Secondly, on the net cost of financial debt, if you look at the P&L, this is exactly as per expectations. You know, these lines don't change. You know, we have the financial restructuring. We have the debt. This is locked. This is documented. The EUR 160 million, this is 50% non-cash, 50% cash. EUR 80 million cash and EUR 82 million non-cash due to the payment in kind and call premium for the bonds and the bank loans. Thirdly, the other items. I understand your question about how does it look like for H2 and beyond. It's a bit difficult to project.
What I can tell you is that we are, how can I say, prudent, cautious. What I know is that we have taken, we have booked everything which we assessed was deemed to be booked. H2, it's a big amount. If you want to be guided, I would rather say to not expect similar amounts in the future. Does that answer your question or anything still unclear?
No, perfect. Thank you.
You're welcome.
Thank you. We will now take the next question from the line of Benoît de Broissia from Keren Finance. Please go ahead.
Hi. I have two questions, if I may. The first one is, do you expect any cash outflows related to litigation in H2 or cash outflows related to loss-making contracts that you were willing to exit going forward? This is the first question. The second question is still about the book-to-bill. I guess we still see figures much below 100%. We're not sure about the growth trajectory for next year because it seems like with such levels, it's going to be difficult. You'll have top line pressure. What kind of confidence do you have to sign new deals and get to book-to-bill to above 100% as soon as FY 2026? Can you give us more color about the pipeline and the timing of potential signings there? Thank you.
As I say, for the growth, the pipeline is increasing. I think it's about EUR 12 billion now, and we have more and more tenders coming. As I said, a lot of clients have reopened. The fact that we can tender, it was not the case for several clients last year. They were waiting. They didn't stop the contract, but in fact, they didn't increase the share for us. They were just waiting to see how Atos is maneuvering in the course of 2025. That's why it's very important that the teams, even myself, meet the top clients to reassure them and say that we are back on track. We have the financial stability to answer new tenders. That's why the pipeline is increasing. It's normal. We are restarting the growth engine. It takes some time. We are on plan. There is nothing new for me.
You will see that the pipeline will continue to accelerate in the coming quarter. I'm quite confident that out of this pipeline, we're going to strike more deals in the quarters. There will be some growth next year. That's the goal for us. I'm quite confident that we will strike some deals in H2 that would be enforced for 2026. Probably we can give more color, probably in the next quarter or at the full year results. You will see that probably by the end of the year. I don't know if you had another question. It was on.
Cash out regarding litigation. [crosstalk]
Litigation. So litigations, I would say, there are not that many cash outs in terms of litigations in H2. I don't think so. We continue, I would say, to have a normal case. I would say it's mainly lawyer fees, but it's not a big amount. As I said, the two contracts that are bleeding, of course, we continue, I would say, to have a cash out. There is one contract that will be probably around minus EUR 10 million, I would say, loss per year that we will stop bleeding in the course of next year. We'll probably try to stop these contracts. The other one is bleeding a little bit more, minus EUR 40 million to EUR 50 million. Around, let's say, EUR 20 million to EUR 30 million. I think we will continue to be in that range, EUR 20 million to EUR 30 million in H2.
We have a lot of actions, in fact, to reduce, I would say, this in the course of next year if we cannot stop the contract. Next year, I think it will be one contract will be flattish, the other probably around minus EUR 10 million, minus EUR 20 million. The sum of the two will be much less than this year.
Very clear. Thank you.
Thank you. There are no further questions at this time. I would now like to turn the conference back to Philippe Salle for closing remarks.
Yes, thank you. Thank you, everybody, for your time this morning. First, as you can see, we are very confident. It's a turnaround of a company. It takes some time, of course, but I would say Genesis is right, I would say, on target. Accelerating, it will be probably a shorter journey than anticipated. As I said, it was a three-year plan. It will be probably a two-year plan. I'm still aiming, I would say, to strike or to finish, I would say, Genesis by H2 2026. Most of the cash out would be, in fact, in the course of this year and next year. There is a big focus on the company for share on growth and technology. It's very important that we spend also, that we show to, I would say, showcase to the clients, in fact, what is the difference between Atos and the competition.
I'm very confident, very happy, I would say, on the H1 results. The resilience of the team is very strong. The staff turnover, in fact, has decreased, which I think is a very good sign. We are now, I would say, looking forward to a bright future for the company. With this, thank you for your time. I wish you a very nice summer. I will probably talk to you or see you, most of you, in the coming months. Thank you and have a good day. Bye-bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.