Alten (ATE) H1 2024 earnings summary

Executive summary

• Revenue reached €2,108.0M in H1 2024, up 2.9% year-over-year, with 0.9% organic growth, driven by France (+5.7% organic), while international growth was modest and international business represented 67.2% of total activity.

• EBIT/operating margin dropped to 8.4% of revenue, down from historical levels above 9-10%, reflecting a slowdown in activity, project postponements, and lower profitability from recent acquisitions.

• Net income, Group share, increased to €118.2M (5.6% of revenue), up from €111.1M (5.4%) in H1 2023.

• Headcount increased to 58,300, mainly through acquisitions, with a focus on expanding in India and other low-cost regions.

• The slowdown in activity observed in H2 2023 persisted into H1 2024, with no rebound expected in the second half.

Financial highlights

• Operating margin fell to 8.4% of revenue in H1 2024, compared to above 9% in prior years.

• Free cash flow reached €98M (4.6% of revenue), with a rolling 12-month free cash flow at 6.5% of revenue.

• Net cash position at June 2024 was €267.2M; gearing at -12.6%.

• Capex remained low at €9.3M (0.4% of revenue).

• Earnings per share: €3.40 (basic), €3.38 (diluted), up from €3.25 and €3.19 in H1 2023.

Outlook and guidance

• Organic growth for 2024 is expected between 0.5% and 1%, with operating margin guidance of 8.7%-8.9% for the full year.

• No significant rebound is anticipated before 2025; activity is expected to remain sluggish due to continued project postponements.

• Management aims to restore EBIT above 10% as business stabilizes and international structure matures.