Alten (ATE) Q2 2024 TU earnings summary

Executive summary

• Revenue for H1 2024 reached €2,108.0m, up 2.9% year-over-year, with France growing 5.7% and international operations up 1.6%.

• Organic growth was 0.9% for H1 2024, limited by fewer business days and project postponements.

• Two overseas acquisitions completed: one in Asia (software development) and one in Poland (IT services).

• Exclusive negotiations underway to acquire Worldgrid, a European energy and utilities solutions provider.

• The business rate declined to 91.2% from 91.8% a year ago, mainly due to delayed projects and cautious recruitment.

Financial highlights

• H1 2024 revenue: €2,108.0m, up 2.9% year-over-year; France +5.7%, international +1.6%.

• Organic growth: 0.9% overall; 5.7% in France, -1.4% internationally.

• Notable declines in Germany (-8.4%), UK (-9.5%), and Scandinavia (-9.2%) for H1 2024.

• Asia Pacific and Eastern Europe showed strong growth at 8.2% and 17.5% respectively.

• Operational margin for 2024 is expected between 8.7% and 8.9%.

Outlook and guidance

• Organic growth guidance for 2024 revised to 1.1%-1.4%, reflecting project delays and macroeconomic headwinds.

• No significant rebound expected in H2 except for some positive signals in the US; Airbus project slowdowns anticipated.

• Operational profitability will be negatively impacted by a higher inter-contract rate and seasonality.

• Cost reduction measures are in place, and further cost control is planned for 2025 if growth remains weak.

• Activity rate and SG&A to revenue coverage ratio expected to be slightly lower than last year.