Hello, welcome to the Atos H1 2023 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, please press star one one on your telephone to join the queue. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would like to hand you over now to the Atos management team. Please go ahead.
Hello. Good morning, everyone, thank you for joining us to discuss Atos H1 2023 results. I'm Nourdine Bihmane, Group CEO and Co-CEO in charge of Tech Foundations. Today I'm joined with my colleagues, Diane Galbe, our Group SEVP, Philippe Oliva, Co-CEO in charge of Eviden, and Nathalie Sénéchault, our CFO. In today's call, I will first share the highlight of the group performance in H1 2023. Philippe and I will then cover the performance of our two businesses, Tech Foundations and Eviden. After that, Diane will provide an update on our strategic transformation project. Nathalie will go through the detail of our financial performance in the first half of 2023. Lastly, we will discuss our outlook before going to Q&A. Overall, in H1, we have kept our momentum and continued to successfully drive our operational improvement.
This ongoing improvement has translated into robust H1 results. In particular, we experienced solid commercial traction at the group level in Q2 with 112% book-to-bill. This is a significant improvement compared to Q1, which was at 73%, evidences the relevance of the go-to-market strategy that are implemented at both Tech Foundations and Eviden. We also delivered a robust organic revenue growth at 2.3% and brought our operating margin to 3.8%. Consequently, we have revised upwards our full year outlook for revenue growth and confirmed our operating margin outlook. We will come back to it at the end of the presentation. Our free cash flow in H1 was minus EUR 969 million and should be broadly similar over the full year.
This reflects the high pace of execution of a major transformative action we are carrying out through the year. The margin expansion, including restructuring and tackling legacy underperforming contract, as well as internal carve-out activities and working capital normalization. We did achieve significant milestone in our transformation project in July, notably the separation of our internal operation into two entities, and we have fully secured our EUR 700 million+ divestment program, which we are now expanding by an additional EUR 400 million. All of this was completed within a 12- months timeframe. Let's now turn to Tech Foundations. As you remember, we recently hosted an Analyst Day that provided to the Tech Foundations team an opportunity to shed more light on our business and on the clear value creation plan that we have in front of us.
We have redefined our portfolio around core activities in order to address a wider market and focus on a higher growth segment in order to deliver a core revenue growth up to 2% in the next two years and accelerating hereafter. We also highlighted our comprehensive margin expansion plan, expected to deliver EUR 1.2 billion in gross benefits by 2026. That will bring our operating margin to industry standard. As of today, we have already delivered 32% of this objective. It has been a very rich and productive 1st year for Tech Foundations. The strong execution of our plan led us to upgrade our midterm ambitions, which are detailed at the bottom right of the slide. A key aspect highlighted at the event was how AI is already and will continue to enhance all aspects of our business.
At Tech Foundations, we are actively embedding several Gen AI platforms to improve our internal and external operations. In our offerings, for example, in Hybrid Cloud, Gen AI will improve the management of IT infrastructure by automated incident triage, ticket routing, and problem resolution. Also, Gen AI is a key technology in providing coding assistance to our Infrastructure as Code practice. In Digital Workplace, too, Gen AI is changing the way we deliver our services with more personalized context-aware experiences, knowledge management, and copilot offering readiness. We are developing new Gen AI offering. Altogether, we are already having highly industrialized Gen AI platform available, with 2 new solutions already released, and we are working on a few additional specific partnership. More to come.
Many use cases are bringing benefits, not only in our sales function for crafting proposal, but also launching automated bid and RFP, response generation, or in procurement with supplier assessment. Overall, Tech Foundations is fully embracing Generative AI technology in our offering, in our operation for our customer, and for our internal efficiencies. Turning back to our H1 result and starting with book-to-bill. Book-to-bill in Q2 was 106%, compared to 67% in Q2 last year. We exceed the 100 mark for the first time since the Tech Foundations business line was created. Our refocused go-to-market strategy is clearly showing some tangible results. We improved the upselling on our top 100 accounts and successfully drove revenue retention with major long-term renewal in Q2.
Commercial traction improved, in particular in the U.S., where we needed the most to rebuild sales teams and commercial pipeline, which we are doing, and it is starting paying off. Throughout Q2, we won several high-profile contracts, including a leading entertainment company based in the U.S., where we extended for 5 year, a Digital Workplace contract and network operation. We are talking about a significant contract value with more than 80,000 clients, with highly automated resolution. We renewed also a contract with Texas Department of Information Resources, where our private cloud and Mainframe-as-a-Service model delivers adaptive, resilient, cost-effective, and secure services to over 35 state agencies. Another one, with ONDA. We renewed for three-year- contract to continue their modernization and delivery of their Digital Workplace services for more than 3,500 associates.
Lastly, we won a contract extension with the European Commission DIGIT, after 15 years of successful collaboration to accelerate their IT transformation project. I will take a moment here to thank all our customers for the deep relationship we have been able to keep and maintain and grow during the years. If we move to the next slide, Tech Foundations generated revenue of EUR 2.9 billion in H1. The core business was stable as the decline of Hybrid Cloud and infrastructure continued to soften, while Digital Workplace and Technology Advisory posted a moderated growth. In parallel, we kept reducing our non-core activities, which I remind BPO and all the hardware and software we sell as part of our portfolio reshaping strategy. As a result, we posted a managed organic decrease of -1.6% in total revenue for H1 '23.
As discussed during our analyst day, we are making steady progress on margin expansion plan, targeting EUR 1.2 billion in gross benefit by 2026. As of June 2023, 32% of this target has already been achieved, compared with 21% at the end of March. Meaning that we had a very productive Q2, with an additional EUR 120 million gross run rate benefit delivered, partially offsetting by cost inflation and backfilling, and the impact of the revenue decrease. This achievement was primarily driven by headcount reduction in high-cost country, 900 headcount in total during H1, and the continuous focus on addressing underperforming accounts, which accounted for 8% of our H1 revenue. That's just 9% last year. This concludes the Tech Foundations section. I will now pass it to Philippe.
Thanks, Nourdine, and good morning, everyone. So like Tech Foundations, Eviden has had a robust first half. Strategically, we are continue to expand our unique sovereign capabilities around data and our technology capabilities, as well as cementing the deep industry expertise that we have, and which is enhanced by an efficient delivery model and a strong IP portfolio. In H1, we opened 3 new cloud centers in India and in Eastern Europe, that reinforce our end-to-end cloud offerings from engineering, application migration to operation, and obviously improving the efficiency and competitiveness of our delivery capabilities. We also launched very significant capabilities that we are calling AIsaac Cyber Mesh. It's a cutting-edge cybersecurity detection and response solution powered by Generative AI technologies, and that we deployed in partnership with AWS.
We also opened a new campus and leading research and development center in Grenoble, in France, with a capacity of 1,300 people, bringing expertise in artificial intelligence, decarbonization, and obviously our high-performance computing capabilities. Lastly, we are getting our digital identity solution ready for what is called on the market, the post-quantum era. Notably, our Eviden leading product on identity management or encryption, will evolve to be adapted to quantum threats by the end of this year, and that's an announcement that you've seen a couple of weeks ago. AI is a domain that we've been working for years. As you know, we already drive solution in infrastructure with our Advanced Computing solution, where we have specific high-performance computers with AI application on-premise or in the cloud for large research center, healthcare, and other application domain, like climate change monitoring.
Of course, GenAI is a fantastic opportunity on the market and also for us, and we're embracing it. What is the GenAI offerings we are building? We are currently building offerings to help our customers fully leverage GenAI from application to orchestration capabilities, new business models, and obviously impact on the infrastructures. This also include a very practical way and pragmatic capabilities on how to roll it out in a corporate environment. That means tackling the regulatory and compliance, making sure that the datasets that we are using are highly secured, and obviously ensuring the highest level of data encryption and security on those environments. This includes local solution and infrastructure, from supercomputers to the edge, as many customers want to leverage GenAI in a private, Sovereign, and high-end secured environment.
In Europe, we are the unique player to be able to provide those kind of capability. That's really something that we are continuously insisting on, related to the fact that we are the sole unique remaining hardware manufacturer in Europe. Our solution in the cloud, notably with our key partners, Microsoft, OpenAI, Google Cloud, and AWS, we are already supporting world-leading customers in this domain. With a specific reference that is currently live for patient data management in the US. Ready to use industry, industry use cases. We know that we are actively developing on the market many, many use cases related to product hyper-personalization, knowledge management, patient assistance, or risk assessment, and secure development capabilities and improvements.
What we are doing differently is that we are already deploying internally what we call our coding acceleration and developer assistance solution, to also drastically improve our cost-based effectiveness and obviously our time to market, to ensure it's a fast deployment of new application to our clients. Of course, we are working to apply GenAI to ourselves. Internally, we say we are drinking our own champagne. We are driving GenAI project in consulting and sales, in marketing development, in obviously application development, but also in a knowledge base model that we are calling Genie. That is basically a, the capitalization of all the IP that we're creating internally, to ensure also a fast understanding and rollout of our co-innovative solution. We all know that GenAI is a revolution.
We all have to leverage it, but what is putting us in a unique position in Europe, is really related to our first dealing with 8,000 data experts and our unmatched number of key patents, such as our 260 patents in cognitive solution. That means artificial intelligence, machine learning, and also our 100,000 patents in Advanced Computing and more. Now, let's go back to our H1 performance and starting with the book-to-bill. One more time, our commercial momentum remained really, really strong in Q2 with the 119 book-to-bill, well balanced between it all and our big data and our cybersecurity, our business. We maintain our focus on what we're calling short-term signings. That means ensuring that our backlog is really well positioned to extract fast revenue yield capability.
Interestingly, our order entry reflect the unique differentiating factors that set Eviden apart. A highly synergetic portfolio. We won, as an example, a very large contract with Coca-Cola Hellenic Bottling Company to provide both application modernization, public cloud migration, data analytics, AI and machine learning, and everything protected with our cybersecurity portfolio. We also announce and demonstrating our leadership in HPC. We won our first major HPC contract outside of Europe with the Ministry of Earth Sciences for climate change monitoring. It's really, really something that we can be proud of, because that drastically changing the way our innovation is recognized on a global basis.
Sovereign Cloud offerings, we won a contract with the European Engineering and Technology Company to deliver first of its kind, AI as a service through Eviden Nimbix Portal, which is a key to the sovereignty cloud strategy and the blueprint for further AI offerings developments. We also demonstrate our deep expertise in selected industry, which is allowing clients to really recognize our differentiated capability in very diverse sectors, including energy, utilities, healthcare, where we recently won a major U.S. company to provide public cloud migration to Microsoft Azure, combining application development and cybersecurity. Now, let's look at our revenue and operating margin. Eviden delivered strong organic revenue growth at 7% in H1. Growth was strong in both cybersecurity and Advanced Computing, as well as Digital and Cloud business lines.
Organic growth improved significantly compared to the same period last year, driven by Smart Platforms and cloud transformational services, along with very positive trends in the public sector and military and defense activity in Europe. Our growth in Q2 is optically lower than what we delivered in Q1. This is a reflect of a higher comparison basis, plus 270 basis points higher than in Q1 and fewer working days in Q2. Our underlying business trends in Q2 remain as solid as what we delivered in Q1. Eviden's operating margin was 5.3%, a substantial increase compared to 3.5% in H1 2022. Despite continued cost inflation, we demonstrated improvement across all activities, resulting from effective cost take-out actions-... portfolio rationalization, and higher cost of absorption in our Advanced Computing and manufacturing capabilities. With that, I now turn it over to Diane.
Thank you, Philippe. Good morning, everyone. As already mentioned in the highlights, H1 2023 was marked by significant milestones achieved in our transformation. One of the main achievements was the completion of our internal operation carve-out. This is a decisive step in the execution of Atos' transformation. We achieved this in the 12-month timeframe. As we announced to you back in the Q1 results, we are now in a position to confirm that we completed in July, as planned, all local carve-outs and underlying separation activities, covering more than 99% of the group's revenue. As a result, Tech Foundations and Eviden are fully operational as separate entities within the wider Atos group. It means that we have now delivered, thanks to the great engagement of our teams, our customers, and our suppliers, the operationalization of the local legal entities in all geographies.
The transfer of our employees, contracts, assets, to name a few, is now completed. Tech Foundations and Eviden have now a distinct operating model, a go-to-market strategy, and a focused portfolio. The internal separation is now done. Atos has therefore completed the rollout of its new client-centric organization and can now focus on innovation and performance improvement with consistent value delivery. The other significant achievement of Q2 was the fact that we fully secured our non-core business divestment program set during the group's Capital Markets Day back in June 2022. The six transactions featured on this slide, four of which are already completed, were carried out efficiently and at good financial conditions for the group. This demonstrates our ability to execute swiftly as well as the attractiveness of our assets.
The results are a more streamlined portfolio for both Tech Foundations and Eviden, and over EUR 700 million of total proceeds secured, which contributes to the financing of our transformation. Building on this success, we plan to expand our divestment program, targeting an additional EUR 400 million in proceeds that will enhance our financial flexibility. When we devised on our program a year ago, and as we refined the scope of the two entities, we identified additional opportunities to rationalize the portfolio of both group. Some of them have already received expressions of interest. We will, of course, keep you updated on our progress as we move forward. Turning now to headcount evolution.
At the end of June 2023, total headcount was 107,000 people, down -3.4% compared to end of December 2022, and down -1.9%, excluding the impact of divestments. In H1, Atos welcome more than 8,400 new employees. Our hiring is selective this year, our ability to attract the right talents across the world is very good. The job market, as you know, is highly competitive, particularly in cybersecurity, cloud, or data sciences, the technology and image of Atos, recognized by the Great Place to Work certification, enable us to onboard as many talents as required by the business. Another highlight is our voluntary attrition. It remains low at 15% in Q2, which is slightly lower than the industry standard.
This is another evidence of the high level of employee satisfaction and commitment at Atos. The reduction in group headcount during H1 primarily resulted from intensified restructuring as part of our ongoing transformative actions, as well as performance-related terminations, resulting in a total of 2,404 exits. Now, I turn the mic to Nathalie. Thank you.
Thank you, Diane. Good morning, everyone. If we take the broad view on Atos' financial position, the group has made notable progress during the past six months. Revenue was EUR 5.5 billion, broadly stable year-over-year, with a robust organic growth offset by divestment and foreign exchange. Operating margin was EUR 212 million, or 3.8% of revenue, more than tripled compared to H1 2022. OMDA was up by 32% to EUR 487 million, or 8.8% of revenue. Normalized net income, excluding exceptional items, was -EUR 113 million, broadly stable year-over-year. Reported net income came out at -EUR 600 million. I will detail that later in the presentation.
In terms of cash generation, we did improve our underlying cash flow from operation in H1 2023, as you will see. This was offset by the ramp-up of transformative actions and associated costs, as we are executing at a high pace on all fronts this year on restructuring, internal carve-out, tackling underperforming contract, as well as working capital normalization. As a result, free cash flow was minus EUR 969 million in H1. Now let's take a deeper dive into each key metrics. Starting with the revenue evolution in H1. Group revenue was EUR 5,548 million in H1 2023, up to the 3% on an organic basis, a combination of a strong 7% growth at Eviden and a managed decrease of minus 1.6% at Tech Foundations, as Nourdine and Philippe explained.
Scope effect was at -1.7%, primarily reflecting the divestment of Atos Italian operations, finalized on April 2023, and Russian activities in September 2022. Foreign exchange had a limited impact at -0.8%, mainly reflecting the depreciation of the pound sterling against the euro over the period. Turning now to our operating margin on slide 22. Atos operating margin, EUR 212 million in H1, or 3.8% of the revenue, meaning that we triple, in fact, we multiply by 3.5 times our operating margin between H1 2022 and H1 2023. This is a combination of strong improvement at both Tech Foundations and Eviden, as Nourdine and Philippe highlighted earlier.
Tech Foundations, with a steady delivery on our margin expansion plan that generated EUR 230 million of growth increment in operating margin year-on-year, offset by cost inflation, backfill, and the impact of lower revenue. Eviden, reaping the benefit of cost takeout actions, notably on staff costs and portfolio rationalization, as well as a better fixed cost absorption in Advanced Computing, thanks to higher revenue. Moving now to our income statement from operating margin to net income. The main items to highlight are as follows: Reorganization, Rationalization, and Integration costs amounted to -EUR 464 million in H1. These are costs associated with Atos transformation plan. This high amount reflects a significant accrual for our new restructuring plan in Germany at Tech Foundations, where we have provisioned the whole plan that will be executed over time.
Second, restructuring costs incurred in the period in other countries. Finally, costs associated with the internal carve-out that was successfully completed at the end of H1. Therefore, RRI costs should logically be much lower in H2. Other items for EUR -53 million includes legal costs and impacts of vendor contract renegotiation. Lastly, net financial expense at EUR -103 million. These are lower than H1 last year numbers, which included a loss of EUR -109 million relating to the disposal of our Worldline shares, which I will remind you, generated EUR 290 million of net profit for the group. Cost of debt was EUR -40 million, increasing compared to EUR -30 million in H2 2022, as we have now drawn most of our bank facilities. Moving now to H1 cash flow statement.
From top to bottom, OMDA improved by circa EUR 120 million, reflecting the strong recovery of our operating margin. CapEx and leases were strictly controlled and reduced by circa EUR 40 million. Change in working cap was -EUR 645 million. On top of our usual seasonality pattern, whereby we have a significant outflow in H1 and inflow in H2, we had a one-off impact of working capital normalization for approximately EUR 250 million in the context of the group transformation. That was anticipated, if you remember, back in June 2022, at the Group Capital Markets Day. This impact relates to factoring, which we reduce and trade creditors.
Adjusted for this normalization impact, our cash flow from operation was minus EUR 200 million, which represent a EUR 144 million improvement year-over-year, reflecting a better underlying of our operational cash generation, thanks to better OMDA and a strict control on CapEx and leases. cash, RRI amounted to minus EUR 274 million in H1 2023, corresponding to transformation costs linked to restructuring and carve-out execution. Lastly, other changes for minus EUR 165 million relate to losses on legacy contracts that were provisioned at the end of 2021 and 2022. This lead us to a free cash flow of minus EUR 969 million in H1 2023. H2 should, of course, be much better, as Nourdine will explain.
If we compare our H1 free cash flow to that of last year, which was at -EUR 555 million, the difference come from, first, working capital normalization impact for circa EUR 250 million. The plan increase in RRI, which reflects the ramp-up of our transformation actions, interest, higher interest and tax, and the other item, which I just described. These four items offset the EUR 144 million underlying improvement in our cash from operations. Looking now at the group net debt. In addition to the free cash flow of the period, we receive proceed from disposal for EUR 218 million. This is mainly our Italian operations that we sold to Lutech. The transaction was closed in April. Including FX and other items, net debt increased to EUR 2.3 million.
This amount is a net of EUR 2.6 billion gross cash and EUR 4.9 billion in gross debt. In addition, we had, at the end of June, other EUR 3 billion of undrawn bank credit facilities. With that, I will turn it over to Nourdine to discuss our outlook.
Thank you, Nathalie. As I mentioned in the introduction, our performance in H1 has reinforced our confidence in our business. Based on the revenue growth delivered so far, and on the visibility that we have for the second half of the year, we are upgrading our revenue growth outlook. We now expect to grow organically between 0%-2%, compared to our previous expectation between -1% to +1%. The dynamics remain the same, with an acceleration of Eviden organic growth compared to 2022, and a continued managed reduction of Tech Foundations revenue resulting from the portfolio reshaping, while our core business is fully stabilized. As for the group operating margin, our outlook remains unchanged at 4%-5%. Eviden operating margin is expecting to increase compared to 2022, while Tech Foundations operating margin is expecting to stay in positive territories.
In term of, in term of cash flow, while the -EUR 969 were a pretty significant drop, I want to remind everybody that it was aligned with what we mentioned in the Capital Markets Day last year, knowing that we were going to accelerate the restructuring and the cost of separation, and as well, transforming or normalizing our working cap. For H2, we will be broadly breakeven, like Nathalie mentioned, including the underlying operational improvement. For the full year, we will be broadly in line with what we delivered in H1. Before going into Q&A, I want to thank all our employees. It has been a year since we embarked on this ambitious transformation process, and their dedication so far has been extraordinary. This concludes our presentation. We will now take your questions. Operator, back to you.
Thank you. As a reminder, if you wish to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, press star one, one again. Please stand by while I prepare your first question. The first question comes from Frederic Boulan at Bank of America. Frederic, your line is open. Please go ahead.
Hi, good morning. Couple of questions, please. First of all, on your leverage. Net debt is now EUR 2.3 billion. How do you see net debt finishing the year, considering your commentary on H2 free cash flow breakeven, any disposal in there or other items? If you can share details at this stage on how you envisage the cap structure of the two units. Second, if you can comment, comment on the spinoff, any next steps in terms of bondholder agreements, et cetera, that we should look for, any timing you can give us on that. If I may, around Eviden, if you can give us a bit of color on, on trends.
We've seen a lot of slowdown across the industry from your competitors. If you can comment a little bit on what you expect for H2 and how you see the group performing versus your 7% target you presented for the business. Thank you.
Hello. On your first question on the leverage, as you rightly pointed out, we have now a net debt of EUR 2.3 billion. We anticipate a free cash flow, as we mentioned, for H2 breakeven. We also anticipate some proceeds from our disposals. Overall, based on this, we have sufficient headroom in term of our banking covenants. On your second question, the capital structure of both entity, we are currently working on it, we will give more information closer to the execution of the separation. On the third question, Philippe?
On Eviden side, first in terms of trends, what we are, what we are seeing clearly here is a very strong dynamic on our cybersecurity and Advanced Computing business. We are still outperforming the market in terms of cybersecurity penetration, and it's mainly related to the application of artificial intelligence in our portfolio. Our Managed Detection and Response are really successful on the market. On the digital side, despite the macroeconomic environment, we are remaining confident on the trajectory that we've defined in terms of revenue generation in H2. I'm not seeing any risk related to the trend that we were expecting.
That is mainly related to the fact that we're also drastically, you probably remember, we said clearly that we're stopping running after everything that is active on the market and really are capitalizing on our cost trends, especially around, let's say, the rise of sovereignty requirements, and the global deployment of our end-to-end solution from the computing part, down to, to, let's say, cloud migration and cloud operations. So, that's the global situation. No specific alarm sign related to the macroeconomic environment. I'm really confident on the fact that we are keeping our trajectory in terms of, in terms of, CMD trend that we presented a year ago.
Okay. Thank you. Thank you. Please stand by for your next question. Your next question comes from Alexandre Faure at BNP Paribas Exane. Alexandre, your line is open. Please go ahead.
Good morning. Thank you for letting me on, and then congratulations on finalizing the carve-out in time. I've got mostly housekeeping questions, I'm afraid. Firstly, on reorganization and rationalization, integration costs, about EUR 500 million in H1, and you talked about having booked the entire cost up front for the German restructuring. Does it mean that RRI cost will be minimal in H2, and that in 2024, they might be lower than the EUR 400 million you initially outlined at the June 2022 CMD? My second point is on provisions. I think there was about EUR 750 million of those at the end of 2022. Am I right to think that this actually went up in H1?
Should we expect all of those provisions to have a cash impact, and could you share a timeline there? Again, apologies, it's a long list. You had EUR 250 million of cash out around working capital normalization, I think you called out. In June 2022, you talked about EUR 400 million of potential impact from working capital normalization. Do you think there's a remainder that still needs to come through, or you reckon you're done, and it's actually a smaller amount that you anticipated? What's the rest of the working cap outflow in H1, the EUR 400 million that remains.
Lastly, could you share the amount of receivable factoring, as it stood at the end of June 2023? I'm finally done. Thank you very much.
Well, start on the on the first first point of your questions. So on transformation cost, H2 will be much more limited than H1 in terms of PNL. You understand that 2023, in, for Atos and for the transformation program, very, very strong year, where we have all our restructuring plan or carve-out, so very strong year. We have a big H1, which which clearly in terms of PNL will be much lower in H1 in terms of PNL. On the cash, cash impact are linear, so H2 will be similar to H1 in terms of transformation cash out.
All in all, we expect roughly EUR 500 million of transformation costs for the full year, both in term of PNL and cash impact.
Got it. More broadly, when it comes to the whole provision amount.
Yeah.
At the end of 2022, so you, you're sort of helping with, 2023. I'm just wondering when the rest of it will start impacting the cash flow statement as well?
Yeah. The provision will be disclosed in our account. That will be published later, early in August. Cash impact was approximately EUR 90 million in 2022. This will possibly be higher this year, as we are addressing our legacy contract. Our free cash flow guidance for this year include the same amount of cash out of provision, same amount as 2022.
Okay. On, on working capital normalization, so you had EUR 250 million in H1, do you think you'll still get to EUR 400 million of cash out related to working capital normalization?
Yeah. You remember back in the June 2022, in the Capital Markets Day, we announced that we may have EUR 400 million of working cap normalization. We have it for EUR 250 million this first semester. The best of our estimate for for the full year is that we would reach EUR 400 million.
Understood.
Maybe just to complement what Nathalie here. We are splitting the businesses, and as we announced last year, we will, and we anticipated to normalize the two working cap of the two future, both companies. Yeah? It is really part of the plan we designed, and we are exactly executing what we mentioned last year.
Right. Right. Yeah. No, this is, this is helpful. Thank you. Very lastly, when it comes to receivable factoring, I know it will show in, in the, in the bigger report in a few days, but if you could share where we stand as of yesterday?
Yes. The amount is EUR 715 million.
715?
Yes.
Thank you very much. That was it. Thanks again for making the time.
Thank you.
Welcome.
Please stand by for your next question. Your next question comes from Laurent Daure at Kepler Cheuvreux. Laurent, your line is open. Please go ahead.
Yes. Thank you. Good morning, ladies and gentlemen. I only have three questions. The first one is on the trajectory. If you could be a bit more precise on the growth you are now generating in cyber and HPC. Are you growing double-digit organic? My second question, I would like to come back on this working cap normalization. I mean, it's not only a reinvoicing factoring, it's more than that. Do you plan to reduce over time, so non-recourse factoring to 0, or do you want to keep some factoring in your balance sheet?
The third point is, if we take the end of the first half, what I really need to have to model the coming years is the, from mid-2023 to, let's say, 2026, how much restructuring charge and maybe provisions for loss-making accounts are still to come? Same for the cash. How much cash outflow do the company still need to spend over the next 2.5 years? Thank you.
Hello, Laurent Daure. It's Philippe Oliva. I, I, I start with the trajectory and I know that you are really impatient. Let's say, to get more breakdown in terms of our financial figures between the different business lines of Eviden. As I said, there, let's say in the course of Q1, and I mentioned that quite rapidly in the earning calls today, we are outperforming the markets on both the HPC dynamic and the cybersecurity. It remains very strong revenue growth.
We are still seeing the same trend in H2, back-end loaded, in terms of operating margin improvement, also, as well as the same profile than what we had in the H2 or 2022. Still some effort to provide in terms of operating margin, let's say, improvement, quite confident, especially, as I said, on the revenue, the revenue growth trend for H2.
Laurent, on your question on factoring, on working cap normalization. We have EUR 250 million of working cap normalization out of which EUR 100 million on factoring and the rest on the supplier side. On your question, whether we will maintain a level of factoring, I mean, the idea is to keep beside this amount of working cap normalization, a level of recurrent factoring.
At the same level as today, 7 15? Or do you plan to push it down?
It's difficult to say right now exactly, but it should be around this number.
Okay. It's really the, the day-to-day working cap, because it's, I mean, the reason why your share has down so much today is, in fact, you already cleaned. We are supposed to have cleaned a large part of the working cap, 18 months ago. I remember there was already a big impact. Does it mean that the, the working cap was massively optimized, 2 or 3 years back? Massively. Is it the case, then?
The fact is that, we have, we have anticipated a normalization of EUR 400 back in June, and we see a normalization of EUR 250 million in H1. That, in end of the year, our best estimate is that we will have EUR 400 million.
I, I think just to, to step in, we cannot really comment on two or three years ago. I think, Laurent, you wanna understand. Anyhow, at the initial of our project, we decided to normalize the working cap. We cleared it by mentioning that we will do EUR 400 million before the end or before the final split. We already achieved EUR 260 million, I think, a little bit more to come, and that's really the project of the entire transformation project that we launched, yeah. Maybe with that last sentence, thank you, everybody, and I will propose we stop here. I wish all of you a nice holidays and talk to you back in September.
Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.