Welcome to the Atos Group Q3 2026 Performance Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Philippe Salle, Group Chairman and CEO. Please go ahead.
Thank you, operator, and good morning, everybody. Let's go directly to the presentation. I will start with the first two sections, and then I will hand over to Jacques-François. We start on page six. The key message for this quarter. First, continued sequential performance improvement. I will come back, of course, on the revenue and the fact that, as I said the last quarter, we are sequentially stable and, of course, easing the comps versus 2025. We confirm also the full-year targets. Second, Genesis. We said already in the first quarter that Genesis was in fact not over, but it was done in terms of the EUR 650 million of savings that we have sketched during the CMD last year. We continue. Genesis will be closed, in fact, by the end of the year. And we will reach far above the target of 6.[audio distortion].
Commercial activity, always lower in Q3, and I will come back on this. Then we continue, of course, accelerating in our strategic pillars. Remember that we have three of them. When I go on the key numbers on page seven. In terms of revenue, EUR 1.642 billion at current perimeter. It's a - 2.4%. We are close to breakeven, and we are very happy, I would say, on this result. Order entry is EUR 1 billion, 62%. Order entry is always lower, in fact, in Q3, just because it's the summer season. Remember also that we have two events for this order entry. The first one is that it is linked to the renewal of large contracts. 50% of our revenues is managed services. And in fact, usually managed services, it's five to seven-year contracts, usually large ones.
But when we have large contracts like CNA, for example, it's a booking roughly of EUR 300 million, EUR 400 million. So of course it pushed very hard, I would say, on the book-to-bill on the order entry. But in Q3, in fact, we didn't have any renewals, and that's why that, in fact, the order entry was more on not managed services than managed services. I would say the performance is quite okay because it means that 62%, we are above the 50 of, let's say, managed services. Remember also that there are some contracts where we don't book any order entry, like for example, EDF or like for example, the contract we have won in the U.K. with the Police. Because it's what we call framework agreement, which means that we have the licenses to play, and of course we're going to play.
Probably, for example, in the U.K., we estimate it's EUR 40 million-EUR 50 million per year, starting already this year and next year. But we don't put any order entry for this contract. That's why I would say, of course, it's lower the book-to-bill. Net change in cash, this one also is a very good news, EUR 44 million. It's the first time since Genesis, and in fact, it's the first time when you look back at the company in 2022, 2021. We have EUR 50 million of restructuring. Remember, we put EUR 120 million of restructuring in H1, so we get EUR 170 million. We estimate that the total for this year will be close to EUR 200 million. It means roughly EUR 30 million more to come in Q4. Then the liquidity, at EUR 966 million.
Remember that in the liquidity, we don't put the TriZetto escrow. It means, in fact, that the cash is roughly above EUR 1.2 billion, and we are quite confident that we will finish between EUR 1.3 billion and EUR 1.4 billion at the end of the year. If we go on page eight, you can see that roughly we have stabilized. I said that, in fact, already since Q1, the revenues. In fact, we don't lose any large contracts in the course of 2026. Unfortunately, we lost some of them, in fact, in the U.S. in 2025. That's why the comps, of course, is a little bit tough in some countries like in the U.S. But of course it's easing. In fact, it's going to ease even more in fact in Q4, because in fact in the U.S., we will be probably growing in the course of Q4.
As you can see, - 11% on the first quarter, roughly - 6% in the second quarter. We are now at - 2%, and we estimate that in Q4 we will be between a 0% and - 2%. If we go on Genesis on the next page. So page nine. As I say, we are above the target. We will finish probably close to EUR 800 million by the end of the year. In fact, I have accelerated Genesis just because, of course, the top line was not there in the course of 2026. As you can see, we have done several initiatives in terms of cost offering and simplifications that, of course, we will continue. Just one probably comment. The billability rate. Remember that the goal was roughly at 85%. We are now close to 84%.
We will touch probably the 85% in the first half year of 2027. Because we are finishing, let's say, the restructuring next year in Northern Europe and France. If we go on page 10, this is a workforce evolution. We are roughly now flat, let's say, quarter-on-quarter. There were not, I would say, big change going forward. You can see also that the attrition now is around 10%, probably too low for a company like us. But at least, I would say, it's good for us, of course, to keep our, let's say, staff, in this moment where we do a lot of change in the company. Now, if I go on the page 11 and the book-to-bill. As I say, it's 62%. As I say, also remember, it's low, but there is no, let's say, renewals in terms of managed services.
It is normal, I would say, that we have this, let's say, a lower book-to-bill. We estimate that the book-to-bill in Q4 will be above 100%. It is always, let's say, higher in the last quarter of this year. The qualified pipeline also is very strong and continues to be stronger, roughly at EUR 1.7 billion, I would say, increase in the course of H1. And also the renewal rate also has increased around 93%. After that, you can see some major wins. I talked about EDF. EDF in the book-to-bill is zero. Metropolitan Police also is zero. It is very close to zero. Also, some framework agreements we had with HMRC, that is also big. Again, this one on the book-to-bill is zero. Then you can see other contract wins that we have, like for example, in Barcelona or the European Space Operator.
For the strategic pillars, remember that it is agentic, digital sovereignty, and cybersecurity. In agentic AI, in fact, we are going to go over agentic. We are going to have a big release in terms of our AI, let's say, development. It will be Monday, next week. It is a suite, in fact, that we are going to launch. It is called Atos Genesis Intelligence, and you will have, of course, more details in the course of next week. But including the AGI, I would say there is a platform called Atos Codex that is very powerful and that we have started to implement in France and in the U.K. Digital sovereignty, just for example, we have also a partner more, I would say, with SAP to be a cloud partner. In cybersecurity, we have launched, let's say, different offers.
Just for information on IAM, identity and access management. Eviden has a solution, and we are the only European, I would say, player that has a solution that is really sovereign and secured, that we can push against most of the U.S., let's say, most of the competition, which is, in fact, in the U.S. If you look at on page 13, some contracts that we have won and also that we are delivering right now. I am not going to, let's say, review all of them, but you have some, let's say, examples in Germany, in China, in Europe, and of course, in France with Gas. Atos, on page 14, on internal adoption of agentic AI. We are also, of course, pushing, as you can imagine, agentic AI very strongly also in the company.
I will come back, in fact, at the end of February, we will have our full year results to show you exactly what we do. In fact, agentic AI for us, it is two things. It is agentify, let's say our back office, so agentic on our own back office and agentify also our own delivery. This of course will be more, let's say, I will explain more what we are doing in the, I would say in the next year in February with the full year results. In terms of cyber, you can see on page 16, I put some, let's say, what we are doing in terms of identity, attack, et cetera. We are also working on the quantum, I would say, response we are going to have in the future. But there is a lot of thing that is done right now.
And remember, it's a mix between Eviden, software, of course, and hardware and of course, Atos services. We estimate that overall the cyber revenues is close probably to EUR 1 billion, so it's 15% of our revenues for the company. Let's go now on the operational performance, country by country. First on page 17, you can see the evolution of the revenues. We start with Q3 last year that we have published. Then you have the divestiture that we have done. Remember that it was Bull and also Tam, and a little bit of Northern Europe. You have the foreign exchange and then you have, I would say the Q3 2025 at current perimeter and exchange, which is EUR 1,683 million. And then, as I say now we are EUR 1,642 million, so we are very close, let's say, to last year.
We are just missing EUR 40 million, which is roughly a 2.4% of organic decrease. Now let's look at the performance country by country. You have here, let's say the view by geo. And remember that with Atos we have six geos and also the view of Eviden. As you can see, we are now growing, in fact, in international market. It's the first time. We continue the growth with U.K. and we are also growing, continuing also the growth with Eviden. France is close to the breakeven, probably in Q4. And then you have Germany, North America and BNN. Let's look at country by country. So Germany, on page 19. So - 6%. We still have some ramp-downs of clients, in fact, that we have lost in 2024 and in 2025.
And also some clients, for example, Deutsche Bank, that has decided, I would say, to internalize some of the managed services that they had with Atos. It's not a loss versus the competition. It's just, I would say, some clients who have decided to do internally what they used to do, I would say, externally. So - 6%, and I would say we are quite stable in terms of revenue when you look at quarter by quarter. When you look at the U.S. on page 20, I think the good news is that we are also stable. We do roughly $96 million per month, between $95 million and $96 million. We estimate that we will continue to do roughly this in the Q4, probably above, and good news is that last year we were exactly at $96 million per month in Q4.
I would say that in Q4, for the U.S., we will probably be at zero or restart growing as soon as next quarter. So in fact, we lost a big contract in 2025. Remember that we have decided, I would say, not to renew this contract because of the margin. And of course, the comparison is still tough, and of course, it will ease in Q4. And then we can probably, I would say, then restart growing in the course of the year of 2027 for the whole year. In France, on page 21, as I say, we are close to breakeven. We have signed a lot of contracts also in France. We see that the commercial development is in good shape. And EDF is a very important contract that we have signed. It doesn't, let's say, give any revenues, in fact, of course, this year and next year.
But we estimate that it will start to give some revenues in the course of 2028. U.K. and Ireland on page 22. In fact, the organic growth is a little bit, let's say, we do not grow at 30% in this country. We are roughly at EUR 300+ million per quarter. Last year, in fact, it was a very low quarter, and that is why the comparison, I think, for me, is a little bit fake. In fact, when you look at Q4, I have done roughly EUR 306 million, I think, last year. We will be probably around this EUR 300 million. So in fact, we will be close to zero. It is just for me an effect between Q3 and Q4, and the fact that the base, in fact, was very low in 2025. But sequentially, we are around EUR 300+ million. It depends on the quarter.
And of course, all the contracts that we have signed will yield, in fact, more revenue in the course of next year. In terms of international market, remember also that we lose also a big client in the banking sector, and we lose it, in fact, not because of Atos, but because also like in Germany, they have decided to put the managed services internally. The comparison was tough, in fact, in 2025, and it was still also for the first two quarters of 2026. It is not the case anymore, so I think it is great. And now we are seeing some growth in different areas. In fact, we are seeing in Spain, also in Eastern Europe, and of course, in Middle East and Asia. Last, BeLux. So Benelux, Northern Europe. This one is a little bit more tricky because also we have exited some contracts last year.
It is a weaker for me Q3, and I definitely think that it will be much better in the course of Q4. So probably the comparison is a little bit tough for Q3, but I definitely think that we will do better in the coming quarters. Eviden. So Eviden, in fact, when you look at the numbers, it seems that it is decreasing, but in fact, with the split of Bull, the comparison, in fact, is not very fair. And the underlying organic growth is 5%. So this is a SBU that is growing at 5% now, and I definitely think that double digit should be the growth going forward. Remember that in Eviden also, Middle East has a big impact on us, especially on Vision AI, and it is dozens of millions for us.
We hope, I would say, to recover on this part. I do not know if it will be in 2026 or 2027, but we know that there is a lot of potential in this region for our Vision AI business. We will see if we can sign some contracts. There is a big one, in fact, that is still waiting, let's say, a signature from one client. We will see if it is in Q4 this year or it will be in the course of 2027. But Eviden, of course, as you know, with defense, with cyber, there is a lot of, let's say, wind in favorable for us, and I think that we will in fact continue to accelerate in the coming years.
With this, I hand over to Jacques-François for the financial results.
Thank you, Philippe, and good morning, everyone. As a reminder, the publication of our quarterly liquidity position is part of the regular reporting requirements, which have been defined in the December 2024 credit documentation. All the certificates are available on our website. The key message for this quarter is that we have reached an important milestone with positive cash generation for the first time since the launch of Genesis. The net change in cash, as you can see in the slide, was positive and estimated at approximately +EUR 44 million in the quarter, including a significant restructuring cash impact of around EUR 50 million. This reflects the progress made on our operational performance and cash discipline and reinforces our confidence that we are all well on track to achieve our full year 2026 guidance. This figure excludes several other items that ultimately impact the liquidity position.
The exchange rate fluctuation, which amounted to approximately -EUR 6 million, M&A for -EUR 5 million, change in unsolicited payments received in advance of the invoice payment due date during the quarter for -EUR 10 million, cash movements relating to other financial assets and liabilities for -EUR 9 million, net fees associated with the successful refinancing of the first lien tranche of the December 2024 debt for -EUR 9 million. Lastly, the factoring. The factoring program has improved liquidity by EUR 14 million during the quarter. Remember that this program provides a secure and recurring source of funding at an all-in attractive cost of 4.25% plus EURIBOR three months. It is committed for a duration of three years on a non-recourse basis, and it is expected to continue to ramp up in the fourth quarter and beyond.
Note that due to the pace of the program ramp-up, we did not buy back debt on the market in Q3, and we started to buy some more in the early days of Q4 before our close period started. Taking all these elements together, our liquidity position increased by EUR 18 million in the quarter compared to our post-debt repayment position to an estimated EUR 966 million as of September 30. This level remains well above the EUR 650 million minimum liquidity requirement under our December 2024 credit documentation. Overall, we turned cash positive in the quarter while continuing to fund the restructuring for the group. We strengthened our liquidity position, and we are starting to benefit from the progressive deployment of our trade receivable factoring program.
That concludes my intervention. I hand over back to Philippe.
Thank you. Remember Q3, Q1, of course, we don't provide a lot of figures, so that's why it's very simple. I will finish this presentation on page 29 on the financial ambition of 2026. In fact, it's the same as the last quarter and in fact the same as the first quarter also. We still see an organic growth. It's not really a growth, it's a decrease at -5%, and it's around -5%. As you can see with Q3 at -2%, we are, I would say in a good way, I would say to achieve, of course, this result. Operating margin around 7%, so we don't change this. A positive net change in cash.
In fact, the cash flow in H1 was -EUR 120 million. We have done roughly EUR 44 million in Q3, so it means we will do EUR 76 million or above in Q4. Remember that right now the position of cash is EUR 1.2+ billion the free cash flow of EUR 76 million . It is EUR 1.3 billion, and probably we have a client in advance payment that we will receive also in Q4. It is still low right now at EUR 100 million. It was roughly EUR 270 million at the end of 2025. It is possible that we finish probably between EUR 1.3 billion and EUR 1.4 billion, probably touching the EUR 1.4 billion with, I would say, client in advance.
In fact, that is exactly what we have said during, I would say, the refinancing in May. We have been cautious, of course, the beginning of July, but we will have, I would say, a very decent position of cash at the end of the year.
With this, I hand over to you, operator, and we can take, of course, questions going forward.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take our first question from the line of Frederic Boulan from Bank of America. Please go ahead.
Thank you. Hey, good morning, Philippe and Jacques-François. Two questions, please, maybe one for Philippe and one for Jacques-François. Firstly, Philippe, if you can spend a bit more time on the overall demand and competitive environments. We are seeing steady revenue improvements. Book-to-bill was low, but you explained not reflecting a number of public contracts. It would be good to understand a bit more demand, competition, pricing. Secondly, Jacques-François, around the refinancing side of things, if you can explain a little bit where you see the main opportunities, the decision framework on opportunities considering the current credit conditions. Thank you.
Thank you, Frederic. On the first one, I think that the market is, I would say, still healthy. The position of Atos, let's say the decrease of the turnover revenues, it's because of Atos. For me, it's not because of the market. I would say, I just want to remind that, of course, the events of 2024 is still alive, unfortunately, for some of our clients. It's easing, and as I say, I think in an interview that this year is better than last year, but is going to be less better, of course, than next year. I definitely think, of course, that the confidence, the trust that the clients are showing now to us is building up, and I'm very happy.
Remember also that we lost a lot of contracts in the U.S. that I definitely think we can probably win back probably in 2028, 2029, because some of the contracts is four or five years. It depends on the length of the contract. But we see now the clients calling back and having, let's say, confidence and understanding, I would say that Atos is back. The fact that we are also a cash flow positive, I think it's a very strong signal for our clients. So I'm very happy also to, and of course, I will be vocal on this one with our key clients. We say the environment is okay. Of course, there is a two way of environment, and I'm sure that my competition is probably telling the same thing, the U.S. and Europe.
U.S., where we see more and more, let's say, AI developments, and we're going to show at the end of February a launch probably of different initiatives in AI in the U.S. I cannot tell you that much right now, but be patient, it will come. Where we see, of course, that the impact, let's say, of agentic is coming more live in our bidding. In fact, if you bid without an agentic component, you're out of the market today. The difficulties for some of the contracts we see is that some of my competition are putting crazy numbers in year three, four or five of the contracts because it's a bet right now. I definitely think that nobody has a clear picture of the impact of, let's say, agentic on our delivery.
We will probably have a better view in the coming months because, of course, we do a lot of things in January. But let's say the competition is quite unrealistic sometimes on the gains that we can do. It could be, for me, some bad contracts, and that's why for some of the accounts, I don't want to take this bet. Atos has not, let's say, the financial strength to, of course, and win some contracts because of that. But in fact, in some contracts, like for example, in CNA, we are able, let's say, to show initiatives, of course, of AI and the fact that we can share after that or give, I would say, part of it or most part of it, let's say, to the customers.
So in the U.S., agentic is more and more live, and we need to, of course, to put this component in our bidding process. In Europe, it's less the case for the moment. I definitely think that we are lagging versus the U.S. For me, as I say, agentic is more a marathon. It's probably a three to five year, probably more, three to seven years, I don't know, before it comes live. Remember also that in Europe, we have also social laws that are more rigid. So of course, when you put agentification in your process, and you cannot get rid of some of your staff, it's more difficult, of course, to see some examples. But we see some appetite. In fact, we have discussions, and with what we're going to launch on Monday, we have already some initiatives in the U.K. and in France.
I think we have the suite we're going to launch on Monday, and you will see that, is unique in Europe. We have also in this suite what we call a platform, Atos Codex. The name, in fact, we at Atos for several years and before the Codex of one of the LLMs in the U.S. And with this platform, in fact, we can do a lot of things for the clients, and we are starting, in fact, to see some results for large clients that we are pushing right now. Overall, I would say the market is there. Of course, there is a lot of, let's say, economic uncertainties in the world, in Europe, and of course, in France now, as you can imagine. But I would say for the IT market, we don't see an IT market that is down.
I think that it's still a healthy market, and we are still, I would say, a small player in this market with a lot of opportunities in front of us.
Taking over the second question, Fred, regarding the refinancing opportunities, decision framework, and our feeling on the market conditions. I would like to say our ambition and our view of the direction of travel regarding capital structure is totally unchanged. Whilst we have ample cash and ample time, because the first maturity is in December 2030, this is true, this is important for us to refi when there will be a good market condition, a good market window.
I think you will not learn anything from my statement, which is that the market is currently not open, far from it, and certainly not for the high yield bonds, which is most likely an important tool for us in the future. Maybe to add to that, meaning that despite the company working on that to be ready, we don't think that there is any window happening in the very near future. However, ambition remains in the next 12- 18 months to go and refi on the market at reasonable conditions. Remember that the first lien refinancing in May was extremely successful. That has allowed us to reduce the overall cost of interest to reduce by 200+ basis points from an average of roughly 10% to an average of roughly 8%. We have taken out the tranche, which is the most expensive.
That was 13%, 9%+ 4%. Now we remain with two tranches which are cheaper. That's 5% + 4% makes 9% for the first and a half, and 1%+ 4% for the second lien. There is no urgency. Where there is maybe a sense, it's not urgency, but let's say it's an important priority for me, is to ramp up and to start really a serious ramp up of the factoring. I'm aware the negotiations, the implementation, the signature of the contract to start the ramp up has been so far slow, but I'm confident that in the near month, this will ramp up much faster. So that's to answer your question, Fred.
Thank you very much.
Thank you.
Thank you. We will now take the next question from the line of Sam Morton from Invesco. Please go ahead.
Hi. Two questions, please, for Jacques-François. One of them is on the factoring program. Can you talk about any teething problems that you experienced in Q3, and whether they're likely to continue in Q4? Because I do think that EUR 14 million was quite a way below what we could have expected after the strong start that you made in June. Secondly, I look at a EUR 44 million revenue improvement in net cash in Q3, and the guide is for a further increase in Q4. Yet management decided to do no bond repurchases in Q3 and only EUR 7 million so far in Q4. I am just trying to understand, what does that tell us about what management thinks the debt reduction— Where does debt reduction sit within management's priorities? Thank you.
Thank you, Sam. You allow me to clarify and give more color on this program, which indeed, I just mentioned, is an important priority. You are correct. You are reading between the lines. In Q3, we experienced some difficulties with the ramp-up of the factoring program. I cannot dwell too much into the details, but I can tell you that these problems are away, and that I do not expect the similar problems in Q4 at all. Quite on the contrary, we estimate the ramp-up with further geographies and the geography already signed will happen in the coming weeks. That is the first point regarding the slow ramp-up in Q3.
The second point is regarding the bond buyback. I think we have clearly signaled that is our intention to buy more bonds on the open market, and I repeat that today again, that is still our intention. Whilst we have signaled that, we have also made it very clear that there is a relationship with the factoring ramp-up and our source of liquidity and our source of cash to proceed with this bond buyback. Very logically, if the ramp-up of factoring has been very slow, this is the single reason for which we have bought little bonds on the open market.
However, of course, as soon as I have more cash from this factoring program, we will buy more bonds. As to Q4, why the amount is—[crosstalk].
Sorry, Jacques-François.
Yes. Yes, please.
Sorry to cut back. If you are so confident that the teething problems on the factoring program are temporary, I do not understand why you would not be more active in the secondary market.
Let me clarify a couple of things. One is that we are subject to close period. The company has some limitations. For example, our close period for Q3 has started on the 5th or 7th of October. We have been able to buy a little bit then, when we had some little bit of ramp-up of the factoring program. Meaning that in the last three weeks we have not been allowed, let's say, to buy bonds on the open market simply because that is regulation. Just before we publish the results, we cannot operate on the open market. Now, I am confident. I said exactly the same thing at the Q2 earnings call, which is that whilst I am confident, and you have heard Philippe and myself, we repeat our guidance for the full year net change in cash.
Even if you are confident, in terms of, how can I say, spending the money and having the money leave the house, well, I need first to have it before I do that. I think this is a good common sense, prudent way of behaving. So bear with us a little bit. The bond buyback will start again as soon as we have some factoring ramp-up, as I am confident it will be.
Thank you. We will now take the next question from the line of Nicolas David from Oddo BHF. As a reminder, to ask a question, please press star one and one. Nicolas, go ahead.
Yes, thank you for taking my questions. The first one is on the outlook. Your 2026 guidance implies organic growth of around, let's say, flat in Q4. How should we think about 2027 from there? Does that exit rate give you more confidence in returning to positive growth next year? More broadly, looking at the next two quarters, what are the key moving parts we should keep in mind? Where do you see the main upside and downside risk to the growth? The second one is on Eviden. On the timing and sizing effect, which penalizes a bit the Q3. Could you give us an idea of the reversal we should expect in Q4? Should we expect a similar positive impact in Q4, potentially pushing growth towards the 15%-20% range?
The last one is on France, on the public sector. Do you expect the activity to stabilize or potentially deteriorate ahead of the presidential election? You mentioned France potentially close to break even in Q4, but any color on which sector will drive that improvement will be helpful. Thank you.
Yes, I would say to reach around -5%, we need to be better, in fact, than Q3. It means we need to be between 0% and -2%, and that's the goal. Are we going to touch the zero? It's too soon to say, but of course, it's our goal. Let's see. I would say we have a better view, of course, month after month. We are just at the beginning of October. There are some contracts that we have signed that also are going live in the course of Q4, so we will see. But that's the way we look at it. I would say that Q4 will be better than Q3. Of course, with this, we are confident to be around - 5%.
For Eviden, I don't know. Yes, of course, it will be better in Q4, you're right. There is, again, one component is Vision AI on Eviden, because in fact, the revenues are close to zero right now because we do a lot in Middle East with this business. We will see. There are some contracts that should start normally in Q4, and of course, that will beef up, of course, the growth versus last year on a new set. We are looking at double-digit growth, in fact, for Eviden. I do not know if it will be 15% or 20%, as you say, but at least double digit, and I think it is possible in Q4. For the public sector in France, I think we continue, I would say, to do a lot of things in the public sector.
We are also pushing, let us say, some cyber contracts also, I would say with some public entities. Let us say for the last two years, in fact, the public sector was roughly a flat plus. There is not, let us say, been a big push, in fact, there. We are more, right now, let us say, active in the private sector than in the public sector. Public sector is big in France, but let us say we do not see a lot of growth for the moment. Probably in cyber, because as you know, in France, it is a big topic for a lot of public institutions. We have won also a big contract in defense that is not yet public, but it will come. It is with Atos on this one, not with Eviden.
I would say there is some traction in the public sector, but we estimate that probably the growth will come more from the private sector than the public sector, and that is why we are pushing harder, let us say, on the private sector in France.
Okay. Thank you.
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 two questions. The first is back on revenues. When I listen to your comments, it seems like that is the opposite of what we have seen for many quarters, that a lot of the regions are about to stabilize. Going forward, do you still see some challenges in some regions, or do you believe entering into 2027, most of them will enter flattish, and then will depend on your bookings later? The second question is going back to cash. You pointed a EUR 50 million of cash outflow on restructuring in the third quarter. I was wondering, going forward in Q4 and next year, what kind of assumption should we take in our model on this specific element? Thank you.
Yeah. On the second question, as I say, EUR 30 million probably in Q4. The envelope of Genesis will be close to EUR 200 million. Next year, you will have the guidance in February, so please wait. Then, yes, I think that most of the bad news are over. So you are right. In fact, in the U.S., you will see in Q4, we will be a zero plus, probably above zero. We continue to grow in the U.K., international, Eviden. International also. So probably the two countries where still some, let us say, more difficult comp will be Northern Europe and Germany, but it is easing also. So yes. As you know, Northern Europe is not a big geo. So yes, we can say that we enter 2027 in a much better, let us say, position than, of course, 2025 and 2026.
Then, of course, I will give you the guidance of growth for 2027 when we publish the full year results end of February.
Yeah. Maybe another one, Philippe. Thank you. Should we worry about any potential big renewal that are soon to come, or shall we be fine on that specifically?
In fact, for 2027, there is only one very big renewal in the U.S. But the contract is going to be renewed in September, October. So I do not expect to lose it, but I would say even if I lose it is not going to be a big impact in 2027. It is going to be an impact in 2028. So no, for next year, in fact, there are not also a lot of large renewals in the pipeline right now.
In Germany, regarding one of the largest customers still, I think is Siemens. Shall we expect any headwind on that customer for 2027?
Yes, you are right. Siemens, in fact, is three Siemens. Remember, we work with Healthineers, Energy, and AG. I would say it is three different stories. We continue to grow, in fact, with Healthineers and Energy. We sign a lot of contracts with SAP, et cetera. Yes, we continue, let us say, to decline with Siemens AG. That is, in fact, has taken the decision, let us say, to diversify their suppliers. In fact, it was a decision taken in 2023 and 2024, and they continue to do that. Yes, for Siemens AG, we will continue to have a decrease, probably between, let us say, EUR 50 million to EUR 70 million. So that is why I say in Germany, it is the only geo where there is, let us say, one impact of a large contract that has continued to decrease.
Okay, that is very clear. Thank you, Philippe.
Thank you. We will now take the next question from the line of Derric Marcon from Bernstein. Please go ahead.
Yep. Good morning, guys. Two questions for me. The first one on the order intake. Can you explain the mechanism that you expect for Q4? You said book-to-bill above 100% . But I was wondering if we can have more granularity about what is new, what is renewal, what will be helpful to grow the top line in 2027, because at the end of the day, the figure we are seeing for 2026 doesn't give us a lot of reassurance about the top-line growth scenario that you have for 2027. My second question is about the embedded. As Laurent said, we are all trying to understand what are the embedded negatives that you will have at the beginning of 2027 in term of growth.
You commented the risk of losing contracts or things like that. But can you also comment the embedded decline coming from price reduction that are already agreed with customer on existing contracts and potentially also the impact of AI? Thank you.
So, as I said, be careful on the book-to-bill, because it's not a direct, unfortunately, reading on the growth of next year, because we do a lot of framework also agreements where we're going to have a lot of revenues. But you don't see this in the book-to-bill. So I'm not scared about the growth of next year. You can see that sequentially we are flat. We're going to be above the Q3 revenues in Q4 because Q4 is always bigger, let's say, than Q3. There are not any big renewals again in Q4, but we have a lot of tenders also for new logos where we think we can probably sign it. It's good news for us in the U.S. and also in Europe. That's why, of course, if we sign this contract, they are EUR 200+ million .
As you can imagine, the book-to-bill, of course, is going to be impacted. It's difficult for me to give you the answer, but probably the way we calculate the book-to-bill, I don't know if it's different from the competition. But it's not because it's below 100% that we don't grow. So be very careful on this one. Also because the framework is not in our book-to-bill, and we do a lot of framework contracts. So if you say we finish around -5%, let's say between 0% and -2% in Q4 and -5% at the yearly, it means normally that we enter the year around -2%, in fact. It is mathematical, but in fact, I think it's probably false, this one, because we have been flat for, let's say, four quarters. So in fact, I think the first quarter was EUR 1,640 million.
It means that, yeah, we enter probably in a good position to show some growth in Q1 next year for me.
Thank you. There are no further[crosstalk].
I can continue. You are right. There is no price reduction we have in the contracts. In fact, in some managed services, there are some, let's say, gains of efficiency that we have every year. But I would say there is nothing in particular in 2027 versus 2026. There is no pattern saying that we accelerate this. AI also, there is nothing in our contracts right now. It is too soon. As I say, in Europe it is not a topic anyway. It will come, but it will take time. In the U.S., it is too soon. For CNA, for example, the AI, let's say, savings was in year, I think, three. We are just entering the first year. There is no impact, in fact, in the course of next year.
I think there is no pressure for us on pricing for next year. We continue, of course, to when you operate managed services, let's say on five, six, seven years, sometimes more, of course, we have efficiency gains. It means that we manage our cost to, of course, have better margin and give part of the margin to the clients. But I would say this is normal business for us. I do not see, let's say, a pattern saying that there will be a big impact for us in the course of 2027. Okay.
Very clear. Thank you.
Thank you. There are no further questions at this time. I would like to turn the conference back to Philippe Salle for closing remarks.
Okay. Any other questions? No. You can try again, operator.
Okay.
Okay. If there are not, yeah, if there are not, I think.
To ask a question, please press star one one.
We are back to work. The year is not finished, and we still have some work. But I would say we are very confident. Confident in terms of revenue, confident in terms of profitability and cash. I definitely think, in fact, that the Genesis plan was a two-year, let's say, a two plan. The first two years, 2025 and 2026 was really, I would say, the restructuring. We are quite over on this one. And then, as I said, the focus now is really on the top line. That's why also because we have also reshuffled a lot of the teams and the head of industries in the different geos, a lot of CEPs and client executive partners.
There are a lot of things that we have done in the course of 2026, and I'm very confident that we are now putting the seeds, of course, for the rebound in 2027. On this, I wish you a very good day. We are, of course, at your disposal for any questions, and I think we're going to meet some of you, some investors in the coming-- In fact, today and tomorrow. And I will come back on the full year results end of Feb.
Also I will probably do, not a CMD, but a small, let's say, a market day, just a half of the plan, what we have done in two years, what are the expectations for 2027 and 2028, and give you, of course, probably more flavor also on AI, because we are doing a lot of things internally, and we definitely think it's going to yield some results, in fact, in our clients. Have a good day, and talk to you next year. Bye-bye.
This concludes today's conference call. Thank you for participating. You may now disconnect.