Atos: Invest Securities downgrades rating to neutral – 6/15/22 at 10:20 a.m.

(AOF) – Invest Securities lowers its buy rating to Neutral and its price target from EUR 38 to EUR 20 on Atos after the presentation of the strategic plan. The design office emphasizes that the group’s situation “has deteriorated to unimaginable proportions”. In particular, the recovery of outsourcing activities (TechFondation) should be longer and above all much more expensive than expected with 850 million euros in restructuring costs for a recovered EBITA of only 200 million, the broker adds.

And this one to warn: “If the plan is financed with debt according to the presented plan, there is little room for maneuver and there is a risk of a capital increase, especially if the macro deterioration would call the recovery plan into question.”


Most important points:

– International leader in digital transformation founded in 1997, European leader in cloud, cybersecurity and supercomputing;

– €10.8 billion activity divided into 3 divisions – infrastructure & data management for 54% of sales, business & platform solutions for 34% and big data & cybersecurity for 10%;

– Geographical balance of revenues: 23% of sales in North America, 25% in Northern Europe, 23% in Central Europe and 22% in Southern Europe;

– Sustainable business model for digital transformation;

– Open capital (9.96% for the Siemens pension fund and 2.2% for the employees), Bertrand Meunier chairs the 13-member board of directors, Rodolphe Belmer is managing director;

– Solid balance sheet with a debt/equity ratio of 28% and leverage of 1.9, which means management excludes any capital increase.


– New strategy: reorientation towards digital, decarbonisation, security and the cloud, which should contribute in the medium term to 65% of the turnover / recovery plan in Germany / towards a sale of on-site infrastructure and traditional data center activities, ie 1/5th of the income;

– Innovation strategy developed in 18 R&D centers with a portfolio of 3,000 patents: open innovation through partnerships with university centers (quantum computing, exascale computing, artificial intelligence, HPC, multicultural leadership, etc.), with alliances with other players (AWS, Dell , Google, Huma, Microsoft, OVHCloud, Sparkle, etc.) and with clients / 2 scientific communities of expert staff of the group / Scaler collaboration program with 50 start-ups;

– Environmental strategy supported by the Digital Transformation Factory, the Hybrid Cloud, the “Business Accelerators” solutions, the “Connected Intelligence” and the “Digital Workplace” and aimed at meeting 3 major challenges: CO2 neutrality from 2028 and halving of emissions by 2025 vs 2021 / sales of decarbonization solutions boosted by the acquisition of EcoAct / investments in hydrogen supercomputers and quantum technologies / launch of the 1st “green” loan;

– Strengthening security with the purchase of the British company Cloudreach and the opening of a sovereign security center in Bulgaria;

– Visibility of the activity with an order book equal to 2.1 years of turnover.


– Delay of order intake and shortening of the term of new contracts;

– War between Russia and Ukraine: low impact in terms of income (0.4%) but high in terms of labor force, services previously provided from Russia have been transferred to India and Turkey;

– Rapid recovery expected after the loss recorded in 2021, against the background of rumors of takeover bids by Airbus, Orange, etc. and the IPO of BDA and security activities;

– After a start of the year marked by a decline in sales, the target for 2022 confirmed revenues ranging from +0.5 to +1.5%, an operating margin of 3 to 5% and a free cash flow between + €150 million and €200 million

The talent war has been exacerbated by Facebook’s announcement, which plans to recruit 10,000 hires in Europe within five years. The lack of human resources is not limited to France or Europe: it is global. For example, 1.2 million computer engineers are expected to be missing in the United States by 2026. According to Numeum, the federation of the digital sector, France has a shortage of about 10,000 computer engineers out of a total of 600,000 people employed by software publishers and digital service companies (SSII). If the phenomenon is not new, it intensifies. It is enhanced both by the hiring of certain companies looking for developers to internalize their essential digital projects, and by the strong ambitions of certain start-ups.

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