Atos: H1 2018 conference call feedback: free cash flow is not everything!
Atos: (BUY, Fair Value EUR163 (+42%))H1 2018 conference call feedback: free cash flow is not everything!
We reiterate our Buy rating following the conference call held yesterday. We are comforted in our conviction that the acquisition of Syntel is a nice move for Atos to boost the systems integration business in North America, while there is still headroom for further M&A activity. The share price fell by 7% on the back of H1 2018 free cash flow down 26%, but most of this surprising fall was caused by WCR seasonality and may be reversed in H2 in order to be at c. 60% of operating margin this year.
Atos is an international information technology services company operating in 52 countries. Co.'s customers are sectors like Public Sector and Utilities, Telecoms and Media, Financial Services, Process Industries and Discrete Manufacturing and Consumer Products and Retail. Co. operates in seven geographical segments: Germany; France; Benelux and The Nordics; U.K. and Ireland; Atos Worldline; Central & Eastern Europe; North America; Iberia; and Other Countries. Co. delivers IT services through the following five segments: Managed Services, Systems Integration, Consulting, Worldline: ePayment Services, and Cloud & Enterprise Software.
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