Alten (ATE) H2 2024 earnings summary

Executive summary

• Revenue reached €4,143.3m in 2024, up 1.8% year-over-year, with France growing 4.8% and international markets up 0.4%, but organic growth declined by 0.2%.

• Margins remained resilient at 9.1% operating profit on activity, though down from 9.4% in 2023, with net income falling 20.1% to €186.4m due to goodwill impairment in the UK and Germany.

• Free cash flow rose 81% to €333.2m (8% of revenue), driven by improved DSO and working capital management.

• Headcount increased to 57,700, with M&A-driven growth offsetting organic declines, especially outside France.

• Sectors like Defence, Energy, and Life Sciences showed growth, while Germany, UK, and Scandinavia struggled due to sector-specific slowdowns.

Financial highlights

• Operating profit on activity was €376.5m (9.1% margin), down from 9.4% in 2023.

• Net income was €186.4m (4.5% of revenue), down from €233.2m (5.7%) in 2023.

• Free cash flow: €333.2m (8% of revenue), up from €183.7m in 2023.

• Net cash position at year-end was €275.5m; gearing at -12.5%.

• CapEx remained low at 0.4% of revenue.

Outlook and guidance

• Management expects a challenging H1 2025 due to fewer working days and sector headwinds, but is cautiously optimistic for H2, anticipating stabilization and potential sequential growth if macro conditions improve.

• Margins are expected to decline in H1 2025 but may recover in H2 with a more favorable calendar.

• Plans to double offshore delivery capacity, especially in India, and target over 70,000 engineers.

• Recruitment will remain cautious and decentralized, focusing on offshore expansion.

• January 2025 business potential is 3.4% below 2024 average (excluding acquisitions).