Atos Shares Surge as Liquidity Tops Forecasts

Atos SE (Euronext Paris: ATO) shares have surged after the company announced that its liquidity position at the end of 2024 was well above the level set out in its Accelerated Safeguard Plan. The French IT group's liquidity is estimated at €2,191 million, more than one billion euros above the €1,152 million expected cash position presented in the plan.

The positive surprise in Atos' liquidity is primarily due to three factors:

1. Estimated €319 million of payments received from customers: Many public sector customers paid in advance of their invoice payment due dates, contributing to Atos' liquidity position.
2. €240 million of net proceeds from the sale of the Worldgrid business unit: The closure of this sale in December 2024 added a significant amount to Atos' liquidity.
3. €440 million of undrawn Revolving Credit Facility (RCF): This facility provided Atos with additional liquidity that was not included in the definition of the year-end cash position in the business plan.

These factors contributed to Atos' liquidity position being €2,191 million, compared to the expected €1,152 million. However, excluding these three items, the 2024 year-end cash position would still be €1,192 million, which is €40 million better than the projection of €1,152 million presented in the plan.

Atos' improved liquidity position is a positive development for the company, as it supports its debt reduction efforts and contributes to its overall financial health. The company has successfully completed its Accelerated Safeguard Plan, which involved a gross debt reduction of 2.1 billion euros, new money debt of 1.6 billion euros, and a capital increase of 145 million euros and 145 million euros in new money equity from a rights issue. The Commercial Court of Nanterre approved this plan in October 2024.

Atos' shares in Paris climbed 10% in early morning trading on January 21, 2025, following the announcement. However, the stock is down more than 90% over the past 12 months, reflecting the company's tumultuous recent history. Atos has lost several chief executives since 2021 amid a wave of profit warnings that dented investor confidence, while its debt had been growing.

Atos' improved liquidity position is a welcome development for the company and its investors, as it demonstrates the company's ability to manage its cash flow and working capital effectively. The company's successful completion of its Accelerated Safeguard Plan and the positive surprise in its liquidity position indicate that Atos is on the right track to restore its profitability and improve its financial health.