Alten (ATE) Q3 2024 TU earnings summary

Executive summary

• Revenue for the first nine months of 2024 increased by 2.6% year-over-year to €3,116.7 million, with France up 5.8% and international up 1.2%.

• Q3 2024 saw a worsening erosion of growth, with unexpected project cancellations, especially in automotive and aerospace sectors, leading to lower-than-anticipated turnover.

• Organic growth was 0.6% for the nine months and 0.1% in Q3, with business activity slowing further.

• Billable activity rate dropped to 91% in Q3, down from 91.8% a year earlier, reflecting higher inter-contract levels.

• Headcount slightly decreased to 58,000, with engineering staff at 51,000, up 1,200 year-to-date mainly from acquisitions.

Financial highlights

• Q3 2024 revenue was €1,008.7M, a 2.0% increase compared to Q3 2023.

• France contributed €1,019.2 million (32.7% of total), up 5.8% year-over-year; international revenue reached €2,097.5 million (67.3% of total), up 1.2%.

• Operational margin for 2024 is expected around 8.7%, impacted by higher inter-contract and SG&A costs.

• Nine-month business was 0.6% higher than last year, with a trivial impact on growth.

Outlook and guidance

• Organic growth for 2024 revised to -0.7% to -0.4% due to project delays and cancellations.

• Q4 2024 is expected to see a decline of -3% to -4.5%, with buffers included for further possible cancellations.

• No signs of a rebound for 2025; entering the year with negative embedded growth and no client visibility on budgets.

• Macroeconomic pressures and client cost reductions are expected to continue impacting growth.