Atos, biggest drop in the SRD market at the close of Friday, September 30, 2022 –

(AOF) –

Atos

(-5.69% to 8.16 euros)

Speculation fell on Atos, which came in at the bottom of the pack mid-session the day after a jump of more than 10% linked to the confirmation of a takeover offer of 4.2 billion euros in enterprise value. for Evidian. The offer for Atos’ digital transformation, big data and cybersecurity activities, formulated by Onepoint, associated with the Anglo-Saxon investment fund ICG, was rejected yesterday by the board of directors of the target.

AOF – LEARN MORE

Key points

– International leader in digital transformation created in 1997, European leader in cloud, cybersecurity and supercomputers;

– Activity of €10.8 billion, divided into 3 divisions: infrastructure, outsourcing and private cloud for 55% of sales, digital, IoT and cloud solutions for 32% and big data & cybersecurity for 13%;

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

– Value maximization business model through restructuring and the division, at the end of 2023, of the group into 2 separate entities – Atos for outsourcing and Evidian for digital and security;

– Open capital (9.96% for the Siemens pension fund and 2.2% for employees), Bertrand Meunier chairing the 13-member board of directors, Nourdine Bihmane having been managing director since July;

– Financial situation under control with €3.5 billion in gross cash and €2.3 billion in credit facilities at the end of June, covering needs estimated at €1.8 billion for restructuring (including €1.1 billion for the future TFCo) hence management’s exclusion of any capital increase but debt rating of €1.8 billion at the end of June, downgraded by S&P.

Challenges

– Strategy aiming at the end of 2023 to split the group into 2 companies, TFCo (Atos) for outsourcing (infrastructure) and connected work environments and Evidian for digital transformation, big data and security: TFCo (Atos): turnaround financed to the tune of €1.1 billion aiming for an operating margin of 6%, a return to revenue growth and free cash flow of €150 million in 2026 / Evidian: repositioning of the portfolio and strengthening of leading positions with high margins via a €400m plan to accelerate its growth to 7% per year until 2026, with an operating margin of 12% and free cash flow of €700m / end of 2023, distribution to Atos shareholders of 100% of the shares of TFCo and 70% of those of Evidian, which will then be listed on Euronext Paris in early 2023;

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

– Environmental strategy supported by the Digital Transformation Factory, the Hybrid Cloud, the “Business Accelerators” solutions, the “Connected Intelligence” and the “Digital Workplace”: carbon neutrality in 2028 and halving of emissions by 2025 vs 2021 / sales of decarbonization solutions, reinforced by the acquisition of EcoAct / Investments in hydrogen supercomputers and quantum technologies / launch of the 1

er

“green” loan;

– Reinforcement in security with the British Cloudreach and the sovereign security center in Bulgaria;

– Continued contract wins, order intake on 1

er

semester equaling one year of income.

Challenges

– After stable revenues and a widening of the net loss in 1

er

semester, 2022 objective, confirmed, of stable revenues and an operating margin of +3%.

Maximum staff turnover

Companies in the IT services sector have seen the departure of more than 20% of their workforce in twelve months. This trend is not unusual in the sector, but it is reaching an unprecedented scale, in a context of strong growth and good recruitment dynamics. In addition, employees have new requirements and aspirations. The main criterion is the flexibility of work and the way it is implemented in the company. The American-Indian company Cognizant saw around 35% of its 330,000 engineers leave the company in one year. Capgemini, grouping 32,000 French employees, recently suffered its first strike since 2008, with a demand for a collective increase in remuneration.

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Atos, biggest drop in the SRD market at the close of Friday, September 30, 2022 –


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