"The IT group Atos was once Europe's hope under current EU Commissioner Breton, and the company's computers are still world class. But the share price is falling and falling. Will this continue?
It is a picture from better times that Thierry Breton shows in autumn 2019 in Angers in western France at the inauguration ceremony of the new Atos test center for supercomputers. After more than ten years at the helm of the IT group, the Frenchman viewed the investment as a contribution to securing Europe's leading role in the field of high-performance computers. Euphoria spread, and the local trade press even talked about the “Hermès the supercomputer”.
However, Breton didn't last long at the top of Atos. At the end of 2019 he moved to Brussels as EU Internal Market Commissioner. And shortly afterwards things went downhill for the once celebrated IT champion.
Improprieties in the accounting became known, but above all it became increasingly clear that Atos had already missed the cloud megatrend under Breton - and the rapidly growing future business with supercomputers, cybersecurity and public data clouds was not enough to cover the losses in the business with fewer and fewer to compensate for in-demand IT services such as classic hosting.
Investors lost confidence and Atos's market value has evaporated from around 10 billion euros to barely more than 500 million euros since the end of 2020.
The CEO has been replaced three times since then. On Monday night, Bertrand Meunier, who took office as Chairman of the Board of Directors after Breton's departure, also vacated his chair. At the same time, the group announced that it would postpone the implementation of the restructuring plan presented in August until the second quarter of 2024. It envisages splitting the group into two independent companies. The loss-making old business is to be sold completely to investors under the name Tech Foundations and the profitable future business called Eviden is to be sold proportionately to investors.
It is still uncertain what will happen next with Atos. With around 107,000 employees, the company is still an industry heavyweight and is no stranger to Germany since it took over the Siemens IT subsidiary SIS twelve years ago. But it continued to be in the red in the first half of the year and, with its plans to split up, has become the subject of a bidding war in which politics is also heavily involved.
The background: Atos is responsible for a number of military-sensitive activities and, among other things, develops applications for processing large amounts of data for the French armed forces. The company is involved in the simulation calculations for the atomic bomb tests, and the French Atomic Energy Commission (CEA) is Atos' largest customer in the supercomputer business.
A recent call by 82 Republican representatives and senators in the newspaper “Le Figaro” shows the results of the political struggle. Atos must "absolutely remain in French hands" because the group is a "key factor" of strategic autonomy through its computer business and, in the future, quantum technology, it said. They criticized the fact that the Elysée Palace and the Atos management were not negotiating a sale to a group of French investors, but rather with a group led by the Czech businessman Daniel Kretínský - a "powerful foreign actor" - according to the break-up plan drawn up by the consulting firm McKinsey, who had little experience in information and communications technology, unlike areas such as energy, media and retail, said the Republicans.
Warning of a “fatal breakup”
The government denies any influence on Atos' sensitive activities through the planned transaction. But the plan to give Kretínský's holding company EPEI all of the old business, including the brand name Atos, and also up to 7.5 percent of the new company Eviden, is also enraging other parties. These include two Atos minority shareholders, the Alix AM and CIAM funds, which have filed a lawsuit with the French financial prosecutor's office for active and passive bribery and false or misleading information. The Udaac shareholders' association also recently voiced its anger loudly. Politically, a letter from former CEA boss Daniel Verwaerde to the Elysée Palace, quoted by the business magazine “Challenges,” also caused a stir. In it he warned of a “fatal breakup” of Atos.
In addition to Yves Bernaert, who was appointed to the top management of Atos at the beginning of October from competitor Accenture, it is now up to the new chairman of the board, Jean Pierre Mustier, to lead the group into calmer waters and return to dialogue with politicians and shareholders. Mustier is no stranger to the financial scene. In 2009, he was head of the scandal banker Jérôme Kerviel's department at the French credit institution Société Générale, which earned him a conviction for insider trading. Between 2016 and 2021 he led the Italian bank Unicredit. He was recently appointed chairman of the supervisory board of the Wiesbaden real estate financier Aareal Bank.
On Monday, the management emphasized that it wanted to stick to the planned split and had already submitted most of the documents for official approval. The exclusive negotiations are expected to be completed at the end of this year and the binding agreements are in place. A general meeting is planned for the beginning of the second quarter of 2024. Atos announced on Monday that liquidity requirements for the coming year could be met based on the latest business forecasts.
At the same time, the company is trying to get away from the negative headlines and focus on promising business areas such as the production of ever more powerful high-performance computers. When it comes to large machines, Atos is among the three largest manufacturers in the world after Hewlett Packard Enterprise (HPE) from the USA and Lenovo from China. The Angers site was recently proudly presented to journalists, where an 80 million euro investment is expected to increase the production capacity of supercomputers by around a third.
There is no shortage of demand, both from car manufacturers who simulate crash tests and fine-tune aerodynamics and from scientific institutions that produce increasingly complex weather and climate analyses. Just a few days ago, a consortium led by Atos was awarded the contract to build the first exascale supercomputer in Europe. The system will be located at the Jülich Research Center on an area the size of around four tennis courts and will have three times the computing capacity of the currently most powerful European supercomputer." [1]
1. Der Absturz eines IT-Riesen. Frankfurter Allgemeine Zeitung (online) Frankfurter Allgemeine Zeitung GmbH. Oct 16, 2023. Von Niklas Záboji, Angers
Komentarų nėra:
Rašyti komentarą