(News Bulletin 247) – The digital services company announced the departure of its general manager who only arrived in October, and issued a warning on its cash generation. Furthermore, the sale of its historic activities to Daniel Krestinsky appears very uncertain.

The drunken boat Atos is rocking harder in 2024. Since January 1, in just ten sessions, the value has already lost nearly 40%. And after dropping 14.7% on Friday, the action collapsed by another 10.5% this Monday at around 10:20 a.m.

The digital services company has delivered a set of announcements that highlight both the instability reigning within it, as well as its operational difficulties.

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Five general managers in less than five years

Arriving in October as CEO from Accenture, Yves Bernaert remained at the helm of the company for less than four months. Atos announced his departure on Monday, with Yves Bernaert himself referring in the company press release to a “difference of point of view on governance to adjust and execute the strategy”. Paul Saleh, until now CFO, will succeed him as CEO while Jean-François Prest, until now CFO of Mobivia, will join Atos to become CFO.

Certainly, Yves Bernaert had been recruited by the former chairman of the board of directors of Atos, Bertrand Meunier, who left a few days after his arrival. Since then, the new president, Jean-Pierre Mustier, former executive of Société Générale, has instilled his own strategy and vision within Atos, which can potentially explain the “differences” mentioned by Yves Bernaert.

But this departure is added to a long list: since Thierry Breton let go of the reins of the company in the fall of 2019, no less than five general directors have succeeded one another: Elie Girard, Rodolphe Belmer, Nourdine Bihmane, Yves Bernaert and, therefore, Paul Saleh.

Atos, at the same time as the announcement of Yves Bernaert’s departure, issued a warning on results, and more precisely on its cash flow.

The group burned cash in the second half

The company confirms its like-for-like growth targets (0% and 2%) and operating margin (4% to 5%) for 2023. On the other hand, the group announced that its cash flow target should be “slightly lower” than the initial objective, to the tune of 100 million euros.

Atos expected to break even in the second half and thus limit cash consumption to around 1 billion euros over the whole of 2023, i.e. the disbursement of the first half. The group should therefore ultimately burn around 1.1 billion euros in cash over the entire financial year.

Which is obviously bad news at a time when the group’s balance sheet, its financial situation and the refinancing of its debt are raising concerns. On Sunday, Le Figaro reported that Jean-Pierre Mustier was preparing an appeal to the Nanterre commercial court to renegotiate his liabilities with 22 creditor banks. A term loan of 1.5 billion euros must in particular be extended by six months twice, with a first extension on January 29.

This Monday, Atos reacted to this information by declaring “that it had not filed a request for the appointment of an ad hoc representative or the opening of a conciliation procedure.” “As previously indicated (January 3, Editor’s note) the company reserves the right to use available legal mechanisms,” added the group.

“Close to zero” visibility

All this occurs while Atos is negotiating the sale of its historic scope (called “Tech Foundations”), that is to say the outsourcing activities, in structural decline, to Daniel Kretinsky.

Atos is seeking to improve the conditions of this sale announced last summer for an amount of only 100 million euros in cash. According to BFM Business, a compromise must be found at the end of the week.

On Friday, information from La Lettre and Les Echos reported that Atos had asked Daniel Kretinsky to go from 100 million to 500 million euros and that these negotiations were off to a very poor start. Which then precipitated the fall of Atos shares. A source close to the matter reported to Les Echos that the operation had less than a 10% chance of being completed.

“If in our opinion this announcement is not necessarily negative (we considered the sale price of Tech Foundations to be aberrant), this information adds uncertainty to a file which was not lacking in it,” says Invest Securities. “Visibility on Atos is close to zero, with as we mentioned last week, the possibility of the financial restructuring of Atos having absolutely nothing to do with that presented last summer,” adds the office. ‘studies.

“The only thing certain is that time is running out, with the group having to face significant debt maturities by the end of 2024/beginning of 2025 (500 million euros of bonds in November 2024, 1.5 billion euros of term loan in January 2025 and 750 million euros of bonds in May 2025), he adds.

Crumbling under a debt which will exceed 3 billion euros at the end of 2023, Atos must clean up its financial situation, with a capital increase which was to reach a little more than 900 million euros, in the terms planned for this summer.

But the conditions of this call to the market, like the amount, will in reality depend on many other parameters, in particular the outcome of the sales operations in which the group is involved. In addition to the sale of Tech Foundations to Daniel Kretinsky, Atos is currently discussing with Airbus a potential sale of BDS, a segment which includes cybersecurity as well as supercomputers and big data, on the basis of an indicative price of 1.5 billion euros.