(BFM Bourse) – Atos plunges on the stock market after the announcement of the forthcoming departure of CEO Rodolphe Belmer, who arrived in January to turn the company around. The French computer giant intends to make a major strategic shift with the plan to split the company into two separate listed entities.
The general manager of the French IT giant Atos Rodolphe Belmer, who arrived in January to turn the company around, will leave the group’s controls no later than the end of the summer, after having launched a project to split into two group entities.
An announcement that greatly displeased the financial markets, the title still yielded 22% Tuesday around 12:15 p.m. on the Paris Stock Exchange after falling 26% at the start of the session, to a low of July 1993. The Atos share had already returned 11% on Monday after the announcement of the split project. Since the beginning of the year, it has sunk by more than 59%.
Lively debates within the board of directors
Mr. Belmer told reporters on Tuesday, before a presentation of the group’s strategic plan to investors, that he intended to leave “at the latest on September 5”, after having launched a plan to split the group into two listed entities, including the two leaders have already been appointed. Rodolphe Belmer, former CEO of Eutelsat, arrived in January with the mission of redressing the group faced with a sharp drop in its turnover and a fall in its value.
According to information from BFM Business, debates were lively within the board of directors of Atos (111,000 employees) on the means of redressing the group, and in particular between the chairman of the board of directors, Bertrand Meunier, and Rodolphe Belmer, before the strategy presented on Tuesday ended up being stopped. “The strategy is a sovereign decision of the board of directors” and the managing director is there “to apply it”, soberly indicated Rodolphe Belmer in front of the journalists who questioned him on these divergences.
Atos’ turnover fell by 2.5% in 2021, and the group has lost three quarters of its stock market value since the start of 2021. The plan to separate the group’s activities led by Thierry Breton until in the fall of 2019 plans to “unleash the potential for value creation” by splitting the historic outsourcing activities (management of IT assets on behalf of companies) which are losing momentum, and the fast-growing activities (consulting in digitization, cybersecurity, high performance servers and supercomputers).
A split into two entities: Atos and Evidian
The first entity to retain the Atos name would benefit from an “ambitious plan” of financing of “1.1 billion euros to accelerate its profitable growth”, according to the group’s press release. This entity, which will undergo a “complete turnaround”, will be headed by Nourdine Bihmane. The second company, Evidian, will bring together the group’s high-growth activities (digitalization consulting, cybersecurity, high-performance servers and supercomputers, etc.), and will be managed by Philippe Oliva. The two entities now represent a similar amount of turnover. But their growth profile is very mixed.
Traditional activities represent 5.4 billion euros, down 12% in 2021, with a negative operating margin of -1.1%. Conversely, Evidian’s activities, which weighed 4.9 billion euros in turnover in 2021, were up 5%, with an operating margin of 7.8%, according to Atos. The computer giant plans to make 700 million euros in asset sales to carry out this project, Mr. Belmer told reporters. The group is also in “advanced discussions with two of its banks” to complete the financing of the operation.
“If the decision is taken to implement this project”, the split would be carried out during the second half of 2023, so that the shares of Evidian can be distributed “by the end of 2023 according to the preferred scenario at this stage,” Atos said in its statement. “The final decision on this proposed reorganization and separate listing as well as its terms and conditions will be taken once the ongoing in-depth analysis is completed,” said Atos.
For 2022, the group maintains its forecasts, with a turnover evolving between -0.5 and +1.5% growth, and an operating margin of 3 to 5%, against 2.5% in 2021.
(With AFP)
SS – ©2022 BFM Bourse
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