Last year, Atos made a loss of no less than €3.4 billion on a turnover of €10.7 billion – an almost unprecedented situation in the world of IT services. The listed company is working hard on a rescue plan.
On the turnover side, the malaise is not too bad: turnover fell by more than 5% to €10.7 billion. The loss of turnover was limited partly thanks to Eviden, which grew 2.9%. Atos also managed to increase its operating margin to 4.4%.
The problems mainly occur on the balance sheet. The losses were largely caused by a write-down of more than €2.5 billion. Atos is also struggling with a sky-high debt (now €2.2 billion), which means the group has to spend a lot of money to pay it off.
To turn the tide, Atos has taken a series of measures, including a reorganization process. Thousands of jobs are being cut worldwide. And that costs a lot of money in the short term: last year hundreds of millions flowed out of the coffers for reorganization costs.
To strengthen the financial position, the board agreed last year to the sale of business units. However, two major transactions fell through. First, the sale of Tech Foundations to Czech billionaire Kretinsky fell through, and earlier this month Airbus indicated that it is no longer interested in Eviden’s Big Data & Security division.
Commenting on the figures, CEO Paul Saleh said that Atos now hopes for a recapitalization in July. The company is in discussions with its creditors about this.
Atos doesn’t have much room to move. The mountain of debt hangs like a millstone around the IT engineer’s neck. Between 2024 and 2029, the company will face a series of maturing debts worth €4.8 billion.
The Netherlands
The situation of the French company is closely monitored by major customers in the Netherlands. Atos has traditionally been an important player in the Dutch market, both in consulting and in technology and managed services. For example, Atos works on large IT projects for the Ministry of Defense and the central government.
The Social Insurance Bank has outsourced the AOW and Child Benefit to Atos, making the company responsible for the financial payment to 350,000 Dutch people who receive long-term care.
Atos has informed the Dutch media that its business activities in our country are healthy. Service to customers is therefore not at risk, according to a spokesperson.
France
The government in France is also following the problems at Atos with suspicion. The French Minister of Economy, Bruno Le Maire, said in an interview that Atos is a crucial company for the French economy and that he will support the group. The government is also looking at options to nationalize Atos, just as was done with banks during the financial crisis.
Not so long ago, Atos was the pride of French IT engineers. The company’s financial demise has caused its market value to collapse. Yesterday the stock closed at €1.60 per share, while three years ago it was trading for more than €70.