Atos plans to undertake a significant share consolidation by early May to restore client confidence after a financial restructuring. Currently, shares are at a historical low following a substantial capital increase last year. Despite a larger-than-expected decline in annual organic revenue, the fourth quarter showed signs of recovery. CEO Philippe Salle, the sixth leader in two years, noted improved client sentiment and discussed potential sales of key divisions amid rising military spending in Europe.
Atos to Initiate Share Consolidation
On March 5, Atos announced plans for a significant share consolidation, anticipated to be completed by early May. This decision, revealed by the CEO during a press conference, comes as the French technology firm aims to restore client confidence following a financial restructuring that concluded last December.
Currently, Atos shares are trading at a mere one-third of a cent, marking a historical low point for the company after executing a capital increase of 233 million euros last year, which led to considerable dilution for existing shareholders.
Financial Performance and Future Outlook
The share consolidation received overwhelming approval at Atos’ general assembly in January. This announcement follows a report indicating a more substantial decline in annual organic revenue than anticipated, primarily due to the termination of key contracts and a sluggish market. However, the company noted a resurgence in activity during the fourth quarter.
For the year 2024, Atos reported revenues of 9.58 billion euros, indicating an organic decline of 5.4%, which was worse than the predicted 4.0% drop. Nevertheless, the fourth quarter saw a notable 9-point increase in the order intake-to-revenue ratio, with order intake reaching 2.7 billion euros.
“In the fourth quarter, our commercial activities regained positive momentum, influenced by an improved perception among our clients and an upgrade in our credit rating,” stated Philippe Salle, CEO of Atos, highlighting the turnaround in client sentiment.
Philippe Salle, who assumed the CEO role in February, is the sixth leader to take charge of Atos in just two years, reflecting the company’s tumultuous recent history. Once viewed as a cornerstone of the French economy, Atos has faced significant financial challenges in recent years, culminating in a restructuring finalized in December.
Last November, Atos entered exclusive negotiations with the French government regarding its ‘Advanced Computing’ segment after an initial broader offer failed. Additionally, the ‘Mission Critical Systems’ division, which is tied to defense spending, is also up for sale. The company acknowledged that the value of this division may have increased due to rising military investments across Europe.
“We anticipate a rise in military-related spending, and this division is closely linked to that sector. We will observe if prospective buyers improve their offers during this competitive process,” commented Salle, while emphasizing that no price has yet been established for the sale of MCS.
“There is no urgency on our part,” Salle added, clarifying that Atos currently possesses sufficient liquidity to support its medium-term strategy and will make decisions based on the offers received. A detailed medium-term strategy announcement is scheduled for May 14 during a Capital Markets Day.