Atos (Euronext:ATO) Q3 2026 Earnings Call

0:00 Thank you for standing by. Welcome to the ATOS Group Q3 2026 performance 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 star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 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.

0:41 Thank you, operator, and good morning, everybody. So let's go directly to the presentation. I will start with the first two sections, and then I will hand over to Jacques-François. So we start on page six. The key message for this quarter, continued sequential performance improvement. So I will come back, of course, on the revenue and the fact that, as I said, the last quarter we are sequentially, let's say, stable. And, of course, easing, let's say, the comps versus 2025. We confirm also the full year targets. Second, Genesys. We said already in the first quarter that Genesys was stable.

1:26 In fact, not over, but it was done in terms of the 650 million 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 60 million. Commercial activity, always lower in Q3, and I will come back on this. And then we continue, of course, accelerating in our strategic pillars, and remember that we have three of them. When I go on the key numbers on page 7, so in terms of revenue, so 1.642 billion at current parameters, so it's a minus 2.4%. So we are close, let's say, to a breakeven, and we are very happy, I would say, on this result. Order entry is 1 billion, 62%.

2:18 So order entry is always lower, in fact, in Q3, just because it's, let's say, the summer season. And remember also that we have two events, let's say, 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 CNF, for example, it's a booking roughly of $300 million, $400 million. So, of course, it pushes us. Very hard, I would say, on the book to build, 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. So I would say the performance is quite okay because it means that 62% we are above the 50% of not, let's say, managed services.

3:14 Remember also that there are some contracts where we don't book any order entry, like, for example, EDF or like, for example, the Contracts we have won in the UK with the police because it's what we call framework agreement which means that we have the license let's say to play and of course we're going to play probably for example in the UK we estimate it's 40-50 million per year in fact starting already in fact this year and next year but we don't put any order entry for this contract and that's why I would say of course it lowers let's say the book to bid. Net change in cash, this one also is a very good news, 44 million, and it's the first time since Genesis, and in fact it's the first time when you look back at the company in 22, 21, and we have 50 million of restructuring.

4:08 Remember, we put 120 of restructuring in H1, so we get 170. We estimate that the total for this year will be close to 200, so it means roughly 30 million more to come in Q4. and then the liquidity at $966 million. Remember that in the liquidity we don't put the 3ZO escrow so it means in fact that the cash is roughly above the $1.2 billion and we are quite confident that we will finish between $1.3 and $1.4 billion at the end of the year. So if we go on page 8 you can see that roughly we have stabilized, and I've said that in fact already since Q1, the revenues. In fact, we don't lose any large contracts in the course of 26.

4:55 Unfortunately, we lost some of them in fact in the U.S. in 2025, and 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. and in fact it's going to ease even more in fact in Q4 because in fact in the US we will be probably growing in the course of Q4. So as you can see, minus 11 on the first quarter, roughly minus 6 in the second quarter, we are now at minus 2 and we estimate that in Q4 we will be between a 0 and minus 2. If we go on Genesis on the next page, so page 9, so we are, as I say, we are Above the target, we will finish probably close to 800 million by the end of the year.

5:43 In fact, I have accelerated Genesis just because, of course, the top line was not there in the course of 26. And as you can see, we have done several initiatives in terms of gross 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. and we will touch probably the 85 in the first half year of 27 because we are finishing, let's say, the restructuring next year in Northern Europe and France. If we go on page 10, this is workforce evolution. We are roughly now flat, let's say, quarter on quarter. There are not, I would say, big changes going forward.

6:30 You can see also that the attrition 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, so 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. So it's normal, I would say, that we have this, let's say, lower book-to-bill. We estimate that the book-to-bill in Q4 will be above 100. It's always, let's say, higher in the in the last quarter of this year. The qualified pipeline also is very strong and continues to be stronger, roughly at 1.7 billion, I would say, increase in the course of H1.

7:23 And also the renewal rate also has increased around 93%. After that, you can see some major wins. I talked about EDF. So EDF in the book is zero. Metropolitan police also is zero. It's very close to zero. also some framework agreements we had with HMRC that is also big and again this one on the book to be zero and then you can see other contract wins that we have like for example in Barcelona of the European Space Operator. For the strategic pillars remember that it's Atlantic, Digital Sovereignty and Cyber Security so in Atlantic AI in fact we're going to go over Atlantic we're going to have a big release in terms of our AI let's say Development.

8:10 It will be Monday next week. It's a suite, in fact, that we're 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 UK. Digital Sovereignty, just for example, we have also a partner more, I would say, with SAP to be a cloud partner. And cybersecurity, we have launched, let's say, different offers. Just for information on IAM, Intercity 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 impacted in the U.S.

9:06 If you look at on page 13, some delivery, some contracts that we have won and also that we are delivering right now, I'm not going to, let's say, review all of them, but you have... Some examples in Germany, in China, in Europe, and of course in France, we see that. Now, at those, so on page 14, on internal adoption of Atlantic AI, we are also, of course, pushing, as you can imagine, Atlantic AI very strongly also in the company. And I will come back, in fact, at the end of Feb, we have a full year results to show you exactly what we do. In fact, Atlantic AI for us, it's two things. It's Agentify, let's say, our back office, so agentic on our own back office, and agentify also our own delivery.

9:57 This, of course, will be more, let's say, 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 15, I put some, let's say, what we are doing in terms of identity, attack, etc. We are also working on the quantum, I would say, response we're going to have in the future. But there is a lot of things that is done right now. And remember, it's a mix between evidence, software, of course, and hardware, and of course, ATOS services. We estimate that... Overall, the cyber revenues is close probably to 1 billion, so it's 15% of our revenues for the company.

10:43 Let's go now on the operational performance country by country. So first on page 17, you can see the evolution of the revenues. So 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 TAB. and a little bit of Northern Europe, you have the foreign exchange, and then you have, I would say, the Q3.5 at current parameter in the exchange, which is 1683, and then, as I say, now we are 1642, so we are very close, let's say, to next year. We are just missing 40 million, which is roughly 2.4% of organic decrease. Now let's look at the performance country by country.

11:34 You have here, I would 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 markets. It's the first time. We continue the growth with UK, and we are also growing, continuing also the growth with Eviden. France is close to the break-even, probably in Q4. and then you have Germany, North America and VNN. Let's look at country by country. So Germany on page 19, so minus 6%. We still have some randoms of clients, in fact, that we have lost in 24 and in 25. And also some clients, like for example, Deutsche Bank that has decided, I would say, to internalize some of the managed services that they have with Atos.

12:30 So it's not a loss versus the competition. It's just, I would say, some clients we have decided to do internally what they used to do, I would say, externally. So minus 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 and 96. We estimate that we will continue to do roughly this in the Q4, probably above. And the good news is that last year we were exactly at $96 million per month in Q4. So I would say that in Q4, for the U.S., we will probably be at zero or restart growing as soon as next quarter.

13:22 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 27 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.

14:07 But we estimate that it will start to give some revenues in the course of 28. Now, UK and Ireland on page 22, in fact, The organic growth is a little bit, let's say, we don't grow at 30% in this country. We are roughly at 300 million plus per quarter. Last year, in fact, it was a very low quarter, and that's why the comparison I think for me is a little bit fake. And in fact, when you look at Q4, and they have done roughly a 306 I think last year. We will be probably around this 300 million so in fact we will be close to zero. So it's just for me an effect between Q3 and Q4 and the fact that the base in fact was very low in 25. But sequentially we are around 300 million plus.

14:54 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 markets, 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. So the comparison was tough, in fact, in 25, and it was tough also for the first two quarters of 26. It's not the case anymore, so I think it's 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 Eastern Asia.

15:42 Last, Benelux, so Benelux, Northern Europe. This one is a little bit more tricky because also we have exited some contracts last year. It is a week 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 quarter. 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 a I know and I definitely think that double digit should be the growth going forward.

16:31 Remember that in Eviden also Middle East has a big impact on us, especially on Vision AI and it's several dozens of millions for us. So we hope, I would say, to recover on this part. I don't know if it will be in 26 or 27, but we know that there is a lot of potential in this region for our Vision AI business We'll 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'll see if it's in Q4 this year or it will be in the course of 27. But evident, of course, as you know, with defense, with cyber, there is a lot of, let's say, wind in favor for us.

17:19 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. So, as a reminder, the publication of our quarterly liquidity position is part of the regular reporting requirements which have been defined in the December 24 credit documentation. All the certificates are available on our website. So 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 plus 44 million euros in the quarter, including a significant restructuring cash impact of around 50 million euros.

18:14 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 minus 6 million euros, M&A for minus 5 million euros, change in unsolicited payments received in advance of the invoice payment due date during the quarter for minus 10 million euros, Cash movements relating to other financial assets and liabilities for minus 9 million euros. Net fees associated with the successful refinancing of the first lean crunch of the December 24 debt for minus 9 million euros. And lastly, the factoring.

19:03 The factoring program has improved liquidity by 14 million euros 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 €18 million in the quarter compared to our post-debt repayment position to an estimated €966 million as of September 30th. This level remains well above the €650 million minimum liquidity requirement under our December 24 credit documentation.

20:05 So 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.

20:24 Thank you. So 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. and in fact it's the same as the last quarter and in fact the same as the first quarter also so we still see an organic growth not really a growth it's a decrease at minus five percent and it's around minus five as you can see with Q3 at minus two we are I would say in good in a good way I would say to achieve of course this result operating margin around seven percent so we don't change this and a positive net change in cash so in fact The cash flow in H1 was minus 120. We have done roughly 44 million in Q3, so it means we will do 76 or above in Q4. Remember that right now the position of cash is 1.2 billion plus, plus the free cash flow of 76.

21:25 1.3 billion and probably we have a client in advance payment that we will receive also in Q4 it's still low right now at 100 million it was roughly 270 at the end of 2025 so it's possible that we finish probably between 1.3 and 1.4 billion probably touching the 1.4 billion with I would say clients in advance and in fact that's exactly what we have said Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To answer your question, Please press star 1 and 1 again. We will now take our first question from the line of Frederic Boulan from Bank of America.

22:29 Please go ahead.

22:32 Thank you. Hey, good morning, Philippe and Jacques-François. Two questions, please. Maybe one for Philippe and one for Jacques-François. So firstly, Philippe, if you can spend a bit more time on the overall context Demand and competitive environments. I mean, we're seeing steady revenue improvements. Book-to-bill was low, but you explained, you know, not reflecting a number of public contracts. So it would be good to understand a bit more, you know, demand, competition, pricing. And 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.

23:20 Thank you.

23:21 Yeah, thank you Frederic. So on the first one, I think that the market is, I would say, still healthy. And 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. and 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 worse 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 onto us is building up and I'm very happy.

24:06 Remember that we lost a lot of contracts in the U.S. that I definitely think we can probably win back, probably in 28, 29, because some of the contracts is four, 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 Atatos 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. So we'd say the environment is okay. Of course there is a two way of environment and I'm sure that my competition is doing, probably telling the same thing, the US and Europe. US where we see more and more let's say AI development and we're going to So, at the end of February, a launch probably of different initiatives in the U.S. I cannot tell you that much right now, but be patient, it will come.

25:04 Where we see, of course, that the impact, let's say, of Adjantic is coming, let's say, more live in our bidding. In fact, if you bid without, let's say, an Adjantic component, you're out of the market today. The difficulties for some of the contracts we see is that some of my competition I put in crazy numbers in year 3, 4, or 5 of the contract because it's a bet right now. I definitely think that nobody has a clear picture of the impact of, let's say, Adjantic on our delivery. We will probably have a better view in the coming months because, of course, we do a lot of things internally. But, let's say, the competition is quite, let's say... Unrealistic sometimes on the gains that we can do.

25:49 It could be for me some black 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 of course 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 let's say in the U.S., Atlantic is more and more live and we need, 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, Atlantic is more marathon-oriented.

26:36 It's probably a three to five years, 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 stuff, it's more difficult, of course, to see some examples. but we see some appetite so in fact we have a discussion and with what we're going to launch on Monday we have already some initiatives in the UK and in France where the I think we have the suite we're going to launch on Monday you will see that is unique in Europe we have also in this suite what we call a platform at those codecs the name in fact was in fact with Atos for several years and before the codecs of one of the LLMs in the US 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.

27:39 So, overall, I would say the market is there.

27:43 There is no, of course, there is a lot of, let's say, economic uncertainties in the world, in Europe, and, of course, in France, as you can imagine. But I would say for the, let's say, IT market, we don't see Thank you very much. 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 verify 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. So 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.

29:12 However, ambition remains in the next 12 to 18 months to go and refine on the market at reasonable conditions. Remember that the first lean refinancing in May was extremely successful. that has allowed us to reduce the overall cost of interest to reduce by 200 plus 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 plus 4. Now we remain with two tracers which are cheaper, you know, that's 5 plus 4 makes 9% for the first and a half and 1 plus 4 for the second lean. So there is no urgency, there is no urgency. Where there is maybe a sense, it's not of 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 factory.

30:05 I'm aware the negotiations, the implementation, the signature of the country 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.

30:38 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 14 million was quite a way below what we could have expected after the strong start that you made in June. And then secondly, so I look at a 44 million euro 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 7 million euros so far in Q4. And so I'm just trying to understand what does that tell us about what management thinks Where does debt reduction sit within management's priorities? Thank you.

31:30 Thank you Sam that you allow me to clarify and give more color on this program which indeed I just mentioned is an important priority. So you're correct, you're 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's 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.

32:23 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. So 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...

32:57 Sorry, to come back, if you're so confident that the teething problems on the factoring program are temporary, I don't understand why you wouldn't be more active in the secondary market. So, let me clarify. A couple of things. One is that we are subject to close period, whether this is for... I mean, the company has some limitations. So, for example, our close period for Q3 has started on the 5th or 7th of October. So we have been able to buy a little bit then when we had some little bit of ramp-up of the factoring program. so 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's 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'm confident and we you know you have heard Philippe and myself we repeat our guidance for the full year net change in cash even if you are confident you know in terms of I can say spending the money and having the money leave the house, well I need first to have it before I do that.

34:19 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'm confident it will be. Thank you. We will now take the next question from the line of Nicolas Touré from AutoBHF. As a reminder, to ask a question, please press star 1 and 1. Nicolas, go ahead.

34:59 Yes, thank you. Thank you for asking my questions. So the first one is on the outlook. I mean your 2026 guidance implies organic growth of around let's say flat in Q4. So how should we think about 2027 from there? I mean does that exit rate give you more confidence in returning to positive growth next year? and more broadly looking at the next two quarters, what are the key moving parts we should keep in mind? What do you see as the main upside and downside risk to the growth? The second one is evident, I mean, 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?

35:44 I mean, should we expect a similar positive impact in Q4, potentially pushing growth towards the 15-20% range? And 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 in color, on which sector will drive that improvement will be helpful. Thank you.

36:17 So, yes, I would say to reach the minus, around minus 5, we need to be better, in fact, than Q3. So it means we need to be between 0 and minus 2%, and that's the goal. Are we going to touch the 0? It's too soon to say, but of course it's our goal. Let's see. I would say we will... 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. And of course, with this, we are confident to be around minus five. For Eviden, I don't know. Yes, of course, it will be better in Q4, you're right.

37:04 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 the Middle East with this business. So, 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 lecture, and then you say, We are looking at double digit growth. I don't know if it will be 15 or 20% as you say, but at least double digit and I think it's 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's say, some cyber contracts also with some public entities.

37:53 It's, let's say, for the last two years, in fact, the public sector was roughly a flat plus. There is no, it does not, let's say, be a big push. In fact, we are more right now, let's say, active in the private sector than in the public sector. The public sector is big in France. But let's say there is no, we don't see a lot of growth for the moment, probably in cyber because, as you know, in France it's a big topic. for a lot of public institutions. We have one also, a big contract in defense that is not yet public, but it will come. And it is with Atos and this one, not with Eviden. So 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's why we are pushing harder, let's say, on the private sector in France.

38:52 Okay, thank you. Thank you. We will now take the next question from the line of Laurent Doré from Cap Le Chevre. Please go ahead.

39:05 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's the opposite of what we've seen for many quarters, that a lot of the regions are about to stabilize. Going forward, do you... 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? And the second question is going back to cash.

39:52 You pointed 50 million of cash outflow on restructuring in the third quarter. I was wondering, going forward, in Q4 and next year, what kind of assumptions should we take in our model on this specific element? Thank you.

40:10 Yeah, so on the second question, as I said, 30 million probably in Q4. The envelope of Genesis will be close to 200 million. Next year, you will have the guidance in February, so please wait. And then, yes, I think that most of the bad news are over. So you're right, in fact in the U.S. you will see in Q4 we will be 0+, probably above 0. We will continue to grow in the U.K., international evident, international also. So probably the two countries where still some, let's say, more difficult comp will be Northern Europe and Germany. but it's easing also so yes and as you know Northern Europe is not a big geo so yes we can say that we enter 2027 in a much better let's say position than of course 25 and 26 and then of course I will give you the guidance of growth for 2027 when we publish the full year results end of February.

41:20 Should we worry about any potential big renewals that are soon to come, or shall we be fine on that specifically?

41:32 In fact, for 2027 there is only one very big renewal in the US, but the contract is going to be renewed in September-October. So I don't expect to lose it, but I would say even if I lose it, it's not going to be a big impact in 27. It's going to be an impact in 28. So no, for next year, in fact, there are not also a lot of large renewals in the pipeline right now.

42:07 And in Germany, regarding one of the largest customers still, I think, is Siemens. Shall we expect any headwind on that customer for 2027?

42:22 Yes, you're right. So, Siemens, in fact, is a free Siemens. And remember, we work with health seniors. Energy and AGUE, so the three, I would say three different stories. We continue to grow, in fact we fail seniors in Energy, we sign a lot of contracts with SAP, etc. And yes, we continue, let's say, to decline with Siemens AGUE, that is, in fact has taken the decision, let's say, to... To diversify their suppliers, in fact, and it was a decision taken in 23 and 24, and they continue to do that. So yes, for Siemens again, we will continue to have a decrease, probably around, probably between, let's say, 50 to 70 million.

43:08 So that's why I say in Germany, it's going to be the only GEO where there is, let's say, one impact of a large contract that is continuing

43:16 to decrease. Okay, that's very clear. Thank you, Philippe. Thank you. We will now take the next question from the line of Derrick Marcon from Bernstein. Please go ahead. Please go ahead.

43:34 Good morning, guys. Two questions for me. The first one on the order intake. Can you explain the mechanism that you expect for Q4? So you said book to bill above 100 million, 100%, sorry. 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 and my second question is about the so the embedded As Laurent said, we are all trying to understand what are the unbuttered negatives that you will have at the beginning of 2027 in terms of growth.

44:28 So you commented the risk of losing a contract or things like that, but can you also comment the unbuttered decline coming from price reductions that are already agreed with customers on existing contracts? and potentially the impact of AI. Thank you.

44:53 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. So it's good news for us in the US and also in Europe.

45:40 and that's why of course if we sign this contract they are 200 million plus as you can imagine the book to build of course is going to be impacted so it's difficult for me to give you the answer but probably the way we calculate the book to build 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 and also because also the framework is not in our book to build and we do a lot of framework contracts So if you say we finish around minus 5, let's say between 0 and minus 2 in Q4 and minus 5 at the yearly, it means normally that we enter the year around minus 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.

46:30 So in fact I think the first quarter was 1640. So it means that we enter probably in a good position to show some growth in Q1 next year for me. Thank you.

46:46 And then probably I can continue what you say. So there is no price reduction we have in the contracts. In fact, there are 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 27 versus 26. There is no pattern saying that we accelerate this. AI also, there is nothing in our contracts right now. It's too soon. As I say, in Europe, it's not a topic anyway. It will come, but it will take time. And in the US, it's too soon. For CNF, for example, the AI, let's say, Savings was in year, I think, three. So we are just entering the first year.

47:34 So there is no impact, in fact, in the course of next year. So I think there is no pressure for us on pricing for next year. We continue, of course, to when we operate managed services, let's say on five, six, seven years, sometimes more, of course, we have efficiency gains. So it means that we manage our costs 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 don't see, let's say, a pattern saying that there will be a big impact for us in the course of 2027. Okay.

48:08 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.

48:23 Okay. Any other questions? No, you can try again, operator. Okay. Okay, if there are not, yeah. If there are not, I think. Please press star one, one.

48:43 So we are back to work. It's not, 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-year plan. The first two years, 25 and 26, 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 NGOs, a lot of CEPs and client executive partners. There are a lot of things that we have done in the course of 26. and I'm very confident that we are now putting the seeds, of course, for the rebound in 2027.

49:31 So, 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 result end of Feb and also I will probably do a Not a CMD, but a small, let's say, market day, just half of the plan, what we have done in two years, what are the expectations for 27 and 28, 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.

50:18 This concludes today's conference call. Thank you for participating. You may now disconnect.