Today’s value in Paris – Atos falls again: the chairman in the shareholders’ sights – 07/04/2022 at. 11:57

(AOF) – Largest decline in the SBF 120 index, Atos fell 7.18% to 11.76 euros; shareholders demanding the resignation of the chairman. According to information from Le Monde, several of them have written to the board to request the resignation of President Bertrand Meunier. The latter evokes a “permanent dialogue with shareholders daily in the evening, whether they are small or large” and says he answers “questions from investment funds with the utmost seriousness to give them the insight they do not have”.

Le Monde clarifies that the choice of Rodolphe Belmer, former CEO of Eutelsat, to take over the helm of the group in January without an internal selection process had attracted attention in the group. Thus, several important leaders have left Atos.

Atos unveiled a new strategic plan in mid-June, leading to a further decline in the stock. Atos plans to split into two listed companies, one specializing in outsourcing – one business in decline – and the other, Evidian, present in digital transformation, big data and cybersecurity. “The recovery of outsourcing activities (TechFondation) should take longer and, above all, much more expensive than expected,” Invest Securities explained at the time.

Also contributing to distrust of Atos, the latter had also announced the departure of its CEO, Rodolphe Belmer, who had only arrived in January.

In the stock market, the Atos title has lost more than two-thirds of its value despite recent press rumors that the state would advocate a merger with Thales. The defense group, 25.7% owned by the state, has been interested in Atos’ cyber security activities for several months.

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Key points

– International leader in digital transformation established in 1997, European leader in cloud, cyber security and supercomputers;

– € 10.8 billion activity, divided into 3 divisions – infrastructure & data management for 54% of sales, business and platform solutions for 34% and big data & cybersecurity for 10%;

– Geographical balance between revenue: 23% of sales in North America, 25% in Northern Europe, 23% in Central Europe and 22% in Southern Europe;

– Sustainable digital transformation business model;

– Open capital (9.96% for Siemens Pension Fund and 2.2% for employees), Bertrand Meunier as Chairman of the Board of 13 members, Rodolphe Belmer as CEO;

– Solid balance with a debt / equity ratio of 28% and a leverage of 1.9, which is why management excludes any capital increase.

Challenges

– New strategy: refocus on digitization, decarbonisation, security and the cloud, which should contribute to 65% of medium-term revenue / recovery in Germany / towards the sale of on-site infrastructure and traditional data center activities, ie. 1/5. of income;

– Innovation strategy developed in 18 R & D centers with a portfolio of 3,000 patents: open innovation through partnerships with university centers (quantum computers, exascale computers, artificial intelligence, HPC, multicultural leadership, etc.), with alliances with other actors (AWS, Dell, Google, Huma, Microsoft, OVHCloud, Sparkle, etc.) and with customers / 2 scientific communities of expert collaborators in the group / Scaler program for collaboration with 50 start-ups;

– Environmental strategy supported by Digital Transformation Factory, Hybrid Cloud, “Business Accelerators” solutions, “Connected Intelligence” and “Digital Workplace” and aims to meet 3 major challenges: CO2 neutrality from 2028 and halving emissions by 2025 vs 2021 / sale of decarbonisation solutions, reinforced by the acquisition of EcoAct / investment in hydrogen supercomputers and quantum technologies / launch of the 1st “green” loan;

– Strengthening security with the acquisition of the British company Cloudreach and the opening of a sovereign security center in Bulgaria;

Visibility of the activity with an order book corresponding to 2.1 years of turnover.

Challenges

– Slowing down order intake and reducing the duration of new contracts;

– Russia-Ukraine war: low income impact (0.4%) but high in terms of workforce, services previously provided by Russia have been transferred to India and Turkey;

– Expected rapid recovery after the loss in 2021 based on rumors of takeover bids from Airbus, Orange, etc. and the listing of BDA and security activities;

– After a start to the year marked by a decline in sales, the 2022 target was confirmed, with revenues from +0.5 to + 1.5%, an operating margin of 3 to 5% and free cash flow between + € 150 million . and € 200 million.

Maximum staff turnover

Companies in the IT services sector have experienced the departure of more than 20% of their workforce in twelve months. This trend is not unusual in the sector, but it reaches an unprecedented extent in a context of strong growth and good recruitment dynamics. In addition, employees have new demands and hopes. The main criterion is the flexibility of the work and the way it is implemented in the company. The US-Indian company Cognizant saw about 35% of its 330,000 engineers leave the company in one year. Capgemini, which groups 32,000 French employees, recently suffered its first strike since 2008 with a demand for a collective increase in pay.

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