We explain the collapse of the company Atos, the former French IT flagship

The company, launched in 1997, is in serious financial difficulties. Its capital increase project, which was supposed to give it fresh air, was canceled on Monday.

The fall never ends. The French IT giant Atos is mired in a financial crisis which has caused its stock price to plunge to historic lows and accelerated the waltz of its managers. The group’s stock dropped nearly 25% on the Paris Stock Exchange on Monday February 5 after a series of strategic announcements concerning the plan to refinance its financial debt. Since January 2, Atos shares have lost nearly 58%. How did the former flagship of French tech get there? Franceinfo explains the situation of the group, responsible for the cybersecurity of the Paris 2024 Olympic Games and essential for the French nuclear industry.

A cybersecurity giant, particularly for the army or the nuclear industry

Little known to the general public, Atos is a key player in the strategic internet security sector. The company was created in 1997 and is positioned as the global specialist in the digital transformation of businesses. It brings together nearly 110,000 employees worldwide, for a turnover estimated at 11 billion euros in 2022. Since 2001, Atos has been the global IT partner of the Olympic and Paralympic Games and, as such, responsible for cybersecurity of the Paris Olympics.

The group is also present in strategic sectors such as defense and nuclear power. In particular, it manages the secure systems of the army and nuclear power plants, produces supercomputers and develops IT management software for public and parapublic services, such as Linky or SNCF.

From 2009 to 2019, the group was led by Thierry Breton, until the latter became European Commissioner for the Internal Market. Under his leadership, Atos has seen its growth swell, with strategic acquisitions: the IT services division of the German industrialist Siemens in 2010, the IT activities of Xerox in 2014 and Syntel in 2018, lists The world.

Risky strategic choices and chaotic governance

Lhe strategic choices of Thierry Breton are proving to be ill-advised, according to analysts and his own successor, Bertrand Meunier, chairman of the board of directors from 2019 to 2023. “The success of the Atos stock price in the 2010s was in reality the result of an acquisition policy and strong external growth which was achieved with questionable or insufficient selectivity”assured the manager in an interview with The gallery in September.

Atos missed key turning points, such as the rise of so-called “public” cloud computing, deployed by the Americans Google, Amazon or Microsoft, which took off during the Covid-19 crisis, when all companies in the world had to rethink the way they work. The principle ? Rather than having its own servers, managed by a service provider like Atos, a company rents capacity from a shared cloud provider, according to its needs. “The public cloud broke the market, and Atos found itself managing obsolete machines”summarizes World Jean-François Perret, from the consulting firm Pierre Audoin Consultants.

Atos also has “missed the outsourcing turn”that is to say the relocation of part of its labor force to countries with lower wages, such as India, observes The world. However, in the digital services sector, “salaries represent almost all expenses”, according to the daily. Thus, the market leader, Capgemini, another French IT flagship, employed 180,000 people there in 2022, compared to only 36,000 for Atos.

Added to these risky choices was chaotic governance: six general directors succeeded one another between November 2019 and January 2024. And the group plunged into crisis. Thus, while it was trading around 75 euros at the start of 2021, Atos shares have lost more than 90% of their value, reaching less than 3 euros currently. The company is now facing a wall of debt with 3.65 billion euros of loans and bonds to be repaid or refinanced before the end of 2025.

A capital increase project canceled

In 2022, the manager at the time, Bertrand Meunier, launched a project to split the group into two entities listed on the stock exchange. On the one hand, Tech Foundations, which brings together its historic outsourcing activities which are losing momentum. On the other, Evidian, which brings together its growing activities such as cybersecurity, high-performance servers and supercomputers, and business digitalization consulting. But this project worries employees and certain shareholders.

A new player then comes into play. Czech billionaire Daniel Kretinsky is positioning himself to take over Tech Foundations. An increase in the capital of Evidian, now Eviden, to the tune of 720 million euros, was also planned and should allow Daniel Kretinsky to become the owner of 7.5% of the capital. But this ambition fell through on Monday. Atos, which justified this decision by “the evolution of the market context” and explained that the “conditions for carrying out the project (…) are no longer met”, however, clarified that another capital increase, of a lower amount, could not be ruled out in the future. At the same time, the group said it was continuing its negotiations with Daniel Kretinsky for the takeover of Tech Foundations. And this, “without certainty that they will lead to an agreement”Atos repeated.

Forced to negotiate with 22 creditor banks, the group announced on Monday that it had requested the appointment of an ad hoc agent, a preventive measure, to assist it in its banking discussions, “with a view to reaching a plan to refinance its financial debt”. The company assures that this decision will be “without impact on employees, customers and suppliers”.

A file closely followed by Bercy and the Senate

Faced with the split plan, 82 LR parliamentarians called for Atos to be maintained “under the French fold”. The possible arrival of Daniel Kretinsky in the Eviden branch, strategic because it is linked to French defense and nuclear deterrence, was worrying. The Minister of the Economy, Bruno Le Maire, assured in November that he would monitor “firmness” to ensure that the group’s strategic activities remain “under exclusive control of France”.

“I have the means to do this thanks to the decree on foreign investments in France to ensure that Atos’ capital in strategic activities remains under the exclusive control of France.”

Bruno Le Maire, Minister of the Economy

in November 2023

At the top of the State, we are also keeping an eye on this issue. Daniel Kretinsky was even received by the secretary general of the Elysée, Alexis Kohler, in September, Mediapart revealed.

The group will also have to face an information mission to the Senate. According to Senator Cédric Perrin (LR), chairman of the Foreign Affairs Committee, it is not excluded “to transform this fact-finding mission into a commission of inquiry”which would expand the powers of senators, in order to “understand what happened at Atos”, he declared at the end of January. Their work should begin “during February”.