On paper, Atos has everything to win. Heir to the know-how of Bull, an IT group acquired in 2014, the company is the only one still producing supercomputers on the Old Continent, from its factory in Angers, Maine-et-Loire. The French flagship of digital services has also made a name for itself in the growing sectors of the cloud, advanced computing and cybersecurity. “Atos is the only player in Europe to have developed the entire information technology chain”, proudly recalls Didier Moulin, delegate of the CGT Atos-Bull. But since Thierry Breton swapped his Atos CEO clothes for those of European Commissioner in 2019, the disappointments have multiplied.
In 2021, his successor Elie Girard hits DXC with a friendly offer estimated at $10 billion. The choice is surprising. The operation would certainly allow Atos to strengthen itself in the United States, but concerns a company in difficulty, positioned on an outsourcing market considered to be not very buoyant… Not to mention that the American weighs close to 18 billion dollars. (about 15 billion euros) against about 11 billion euros for the French. The biggest deal in Atos’ existence fizzled out, but the stock price took a hit.
A stock price divided by more than five
Added to this strategic misstep are the reservations expressed by the auditors concerning the results of two American subsidiaries, which manage around ten percent of Atos’ turnover. This is too much: the shareholders refuse to approve the consolidated accounts at the general meeting. During the month of August, the reservations were lifted, which did not prevent the group from being ejected shortly after from the CAC 40, and Elie Girard, from his seat as general manager. The former boss of Eutelsat, Rodolphe Belmer, succeeds him. He will not be able to stem this descent into hell either and ends up throwing in the towel: arrived in January 2022 at Atos, he leaves the ship in June to join his true loves, the media. All with a parachute of 1.8 million euros.
Conclusion: in four years, the price of Atos on the stock market has been divided by more than five, bringing down its capitalization to 1.5 billion euros. The rebound in its turnover in 2022, confirmed in the first quarter of 2023, has not yet erased the approximately 4 billion euros in losses accumulated in 2021 and 2022. Its operating margin has stagnated around 3%, when rival Capgemini peaks at 13%. How did the French champion come to this? For some, his fate is partly due to the legacy bequeathed by his emblematic ex-CEO. “Under the Breton era, we experienced a strong rise, driven by a frenzy of purchases, and entry into the CAC 40. But this race for numbers prevented us from betting on the long term and on people”, deplores Alia Iassamen, coordinator at the CFDT.
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Especially since some of these operations still weigh on the accounts. This is the case with the purchase of Syntel in 2018. This 3.4 billion dollar coup allows Atos to accelerate its growth in the United States and to offer “an attractive ‘offshore’ environment”, according to the release of the time, through offices in India. Clearly, to offer low-cost services, as its competitors already do. Atos wins on all counts, or almost. Because since 2015, a dispute opposes Syntel to the software publisher TriZetto. At the end of the day, 570 million dollars in damages. At the beginning of May 2023, the American courts ruled in favor of Atos, paving the way for a reduction in the bill. A sword of Damocles whose company would have gone well all the same, she who has no other choice but to transform herself from top to bottom.
Results in the process of improvement
She is supported in this ordeal by McKinsey, who has accompanied Atos for a long time. Some observe the consulting firm’s balance sheet with caution: “It was McKinsey that notably served the group with the reorganization plan called Spring, a gas plant abandoned last year,” laughs Didier Moulin. Strangled, Atos is today forced to activate the horse remedy that many feared. Like IBM, the company formalized its split in 2022. Its outsourcing activities, grouped under the Tech Foundations banner, are being separated from cloud, big data and security assets, united under the Eviden banner. As a result, a three-headed management team.
In decline, the first branch employs half of the 112,000 employees of Atos, and generates more than 50% of overall turnover. To find some air, the historic lung of Atos is refocusing its activities, at the cost of a severe degreasing: 900 people have already left the company, in accordance with a target of eliminating 7,500 jobs by 2026. This translates into voluntary departure and early retirement measures, mainly in Germany. At the beginning of June, before analysts gathered in Paris, the general manager of Tech Foundations, Nourdine Bihmane, welcomed the first effects of this restructuring. Positive operating margin again, return to growth expected from 2026 for the branch… Does Atos see the light at the end of the tunnel? “The operational results are there, which demonstrates the validity of our plan”, insists the management, while welcoming a split which is progressing “faster than expected”.
But among some shareholders, disbelief remains. From his opulent offices in the west of Paris, the founder and partner of Sycomore Asset Management fears that the division, to which he adheres in principle, will be carried out as “a purely defensive strategy to finance the recovery plan” of Tech Foundations. More than to the successive managements, it is to the board of directors that Cyril Charlot imputes the responsibility for the setbacks of Atos. And especially to its president, Bertrand Meunier, whose dismissal Sycomore will ask, with two other directors, at the general meeting of June 28. “All three have been present for more than twelve years at Atos. They have never voted against the decisions taken by the various leaders. Yet it is their role to defend the social interest of the company, says Cyril Charlot. A reshuffle must take place to validate the relevance of the current division, and create a shock of confidence.
Rising to 3% of the capital by rallying other shareholders, Sycomore filed its resolutions, including the appointment of Léo Apotheker as chairman of the board. This 69-year-old Franco-German was CEO of SAP and Hewlett-Packard. If he decided “to get back on his horse”, it is to oppose an “unacceptable industrial decline, especially in a context where the demand for digitalization has never been so strong”, asserts-t- he. To remedy what he calls a “governance failure”, the candidate undertakes to appoint “a third of the members who really understand technology” to the Atos board, and to create a “climate of openness”. , where adversarial debate is possible”.
Atos denounces “attempts to destabilize”
A sling that arouses the fury of the management of the digital services group. At the beginning of June, she split several press releases to denounce “attempts at destabilization and denigration”, confirm her support for Bertrand Meunier and tackle in passing the balance sheet of Léo Apotheker, judging that “his background in each of the companies [HP et SAP, ndlr] raise questions”. “More than half of the board has been renewed since last year, with the appointment of five new directors, including four independent”, adds Atos. Its management welcomes the recommendation of ISS, the most known to US agencies specializing in shareholder voting advice, to speak out against the resolutions filed by Sycomore.
The arm wrestling also crystallizes around the discussions carried out with a view to a possible transfer of Tech Foundations. Atos exchanges in particular with the Czech businessman Daniel Kretinsky on the file. “It is urgent to take your time and negotiate in a better position”, still tackles Cyril Charlot. A vision shared by analysts: in a note at the beginning of June, Kepler Cheuvreux considers that one should not “sell Tech Foundations at a reduced price if [Atos] believes it is able to turn the business around”. At the same time, Atos still seems to be looking for a shareholder for Eviden to allow it to surf on a promising market. Airbus: Will the company want to give pledges to its shareholders before the general meeting?
At Bercy, as in the Armies, the movements of Atos are watched like milk on fire. If the State is not a shareholder, it relies on the company to carry out ultra-sensitive contracts. Evidenced by its involvement in the Scorpion program to modernize the Army’s combat capabilities. One thing is certain: the general meeting of Atos, which promises to be eventful, will be followed with great attention. It could prove decisive for his future.