Atos withdraws from its activities in Italy – 17.11.2022, at 08:41

(AOF) – Atos has entered into exclusive negotiations with Italian IT services and solutions provider Lutech for an all-cash sale of its operations in Italy (Atos Italia). The proposed transaction will see two-thirds of the digital transformation specialist’s €700 million asset disposal program delivered in less than five months.

The scope of the proposed transaction is approximately 2% of the group’s total revenue in 2021, excluding EuroHPC’s activities in Italy, which will be continued within the Atos Group, as well as the Italian operations of United Communications and Collaboration.

Completion of the transaction is expected in the first half of 2023, subject to regulatory approvals and works council consultation.

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Key points

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

– EUR 10.8 billion activity divided into 3 divisions: infrastructure, outsourcing and private cloud for 55% of sales, digital, IoT and cloud solutions for 32% and big data and cyber security 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;

– Restructuring and value maximization business model by splitting the group into 2 separate entities at the end of 2023 – Atos for outsourcing and Evidian for digital and security;

– Open capital (9.96% for Siemens pension fund and 2.2% for employees), 13-member board of directors Bertrand Meunier, managing director Nourdine Bihman;

– The financial position is under control with total cash of €3.5 billion at the end of June, followed by €2.7 billion in bank financing to cover the restructuring costs associated with the demerger.

Challenges

– Strategy for the second half of 2023 for the division of the group into 2 companies, Tech Fondations for outsourcing (infrastructure) and related work environments and Evidian for digital transformation, big data and security:

– Technical Funds: 1.1 billion euro funded recovery in 2026 with revenue growth, 6% operating margin and free cash flow of 150 million euro,

– Evidian: repositioning the portfolio through a €400 million plan to increase its growth to 7% per year by 2026 with an operating margin of 12% and a free cash flow of €700 million and strengthening the leadership positions with high margins,

– At the end of 2023, the distribution of 100% of Tech Fondations’ shares and 70% of Evidia’s shares to Atos shareholders, 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 through cooperation with university centers (quantum computing, high-scale computing, artificial intelligence, HPC, multicultural leadership, etc.), alliances with other players (AWS, Dell, Google, Huma, Microsoft, OVHCloud, Sparkle…), customers,

– 2 scientific communities consisting of expert employees of the group,

– Scaler program + cooperation with 50 startups;

– Environmental strategy supported by Digital Transformation Factory, Hybrid Cloud, “Business Accelerators” solutions, “Connected Intelligence” and “Digital Workplace”:

– Carbon neutrality in 2028 and halving of emissions by 2021 compared to 2025,

– sales of decarbonization solutions enhanced by the purchase of EcoAct,

– investments in hydrogen supercomputers and quantum technologies,

– Putting the 1st “green” loan into use;

– Advancement in security with British Cloudreach and Sovereign center in Bulgaria.

Challenges

– Increase in order intake in the 4th quarter, up to 71% of revenues at the end of September;

– Debt leverage control, 3.75%;

– Interest of personal funds for one or another of the divided activities;

– After returning to sales growth (5.7%) in the 3rd quarter of 2022, the goals for 2022 were set: at the top of the turnover (from 0.5% to 1.5%) and 3% – increase in operating margin in the range below 5% and cash flow below the range of -150 to 200 M€.

Maximum staff turnover

Companies in the IT services sector have seen more than 20% of their staff leave their jobs over the past twelve months. This trend is not unusual in the sector, but it is on an unprecedented scale in the context of strong growth and good employment dynamics. In addition, employees have new demands and wishes. The main criterion is the flexibility of work and the way it is implemented in the company. American-Indian company Cognizant saw nearly 35% of its 330,000 engineers leave the company within a year. Capgemini, which unites 32,000 French workers, recently held its first strike since 2008 to demand a collective wage increase.