The ailing Atos has recorded a loss of 3.44 billion euros for 2023. The figures have gone seriously into the red, mainly due to a write-down of 2.55 billion. In 2022, the loss amounted to more than one billion euros.
The sudden depreciation, which is on an unprecedented scale for an IT service provider, indicates that the balance sheet had previously been unfairly cleaned up. This can be done by including self-developed software on a large scale that is difficult to commercialize in practice. It is difficult for external auditors to dispute the value of such software shortly after development. If it later turns out that this software is a dime a dozen, an accounting correction will have to be made. In the past, the Dutch IT group HCS was also caught with such practices. At the time, HCS had students write simple software, solely for the purpose of improving the appearance of the balance sheet.
It is also remarkable that Airbus ultimately decided against the acquisition of BDS (Big Data & Security) because the security solutions of this Atos unit were not very special. In the eyes of Airbus, the technology behind BDS’s supercomputers also appeared to be less advanced than Atos made it appear.
Net debt
Last year, almost 1.08 billion euros flowed from the treasury, partly due to high reorganization costs. Turnover increased 0.4 percent to 10.69 billion euros. Atos did manage to increase its operating margin to 4.4 percent. Net debt increased last year from 1.45 billion euros to 2.23 billion euros. The millstone around Atos’ neck is the obligation to financiers to pay off debts quickly. Atos doesn’t have that money. Due to the failure of the sale of Tech Foundations (outsourcing) to the Czech billionaire Kretinsky and the sale of BDS (part of Eviden) to Airbus, there is little hope for a quick liquidation of the cash.
Atos is trying to achieve a recapitalization in July. The banks and bondholders have to pay a lot of money for this. The group has now entered into what is called an ‘amicable reconciliation procedure’ in France with its financiers. This step has no consequences for suppliers, employees and other creditors. In an explanation of the annual figures, Atos said in July that it was aiming for a ‘global agreement’ for debt restructuring. That summer month is so important because that is when the Olympic Games start in Paris. Atos CEO Paul Saleh says he is not concerned about this event, which is dependent on his group for IT.
However, Dutch governments are not confident of a positive outcome, reports NRC. The Ministry of Defense and the Social Insurance Bank (SVB), among others, are taking measures to compensate for the possible disappearance of Atos. The implementation of the AOW and Child Benefit payments has been entrusted to Atos. The CIZ (Care Assessment Center) is also taking action to safeguard services for 350,000 Dutch people who receive long-term care. The Ministry of Defense is also preparing for a doomsday scenario by working – with other market parties – on alternatives. Atos plays an important role in the GrIT project to renew the IT infrastructure of the defense apparatus.