FILE PHOTO: A French national flag flies near a logo of French IT consulting firm Atos, at the entrance of a company's building, in Angers, France, March 20, 2024. REUTERS/Stephane Mahe/File Photo
(Reuters) -Struggling French IT firm Atos reported a 4.4% organic drop in third-quarter revenue on Thursday, owing to softer market conditions, but said it has seen an improved order entry for the quarter ahead.
Group revenue in the third quarter of the year fell to 2.30 billion euros ($2.48 billion) on a constant currency basis from 2.41 billion euros in the year-ago period.
"I expect stronger commercial activity in the coming months, with the anticipated return of multi-year strategic contracts with existing customers," outgoing CEO Jean-Pierre Mustier said in a statement.
Mustier will be replaced from February by Philippe Salle, Atos' sixth CEO in less than two years, who has pledged to invest 9 million euros in the company's ongoing restructuring.
The company's order entry as of Sept. 30 was at 1.5 billion euros.
Its book-to-bill ratio, which represents the numbers of orders received to those fulfilled, stood at 60% for the Tech Foundations business.
The company expects the unit's book-to-bill for the fourth quarter to be close to the historical average of 98% on the back of multi-year contracts returning.
The higher the ratio, the likelier the business is to cover new orders.
Shares opened 2% higher on Thursday.
Atos, regarded as one of Europe's most strategic firms in the software and technology sector, secures communications for the French military as it owns the supercomputers that simulate nuclear bomb tests in France.
It also provides critical IT services to the National Health Service in Britain.
However, a string of debt-financed acquisitions and profit warnings resulting in many major management changes have impaired its solvency in the past few years.
Its share price has lost around 90% of value since January.
Atos' financial recovery hinges on the implementation of an accelerated safeguard plan announced in July.
The Nanterre Commercial Court approved the rescue plan earlier on Thursday, with the transactions expected to be executed between November and January 2025.
The court told Reuters that it will render sometime in the future its final decision on the sale of Atos' cybersecurity unit BDS to the French state.
(Reporting by Gianluca Lo Nostro and Pauline Foret; Additional reporting by Florence Loève; Editing by Janane Venkatraman)
