Atos, SRD market’s biggest gainer and SBF 120 Monday January 22, 2024 – 01/22/2024 at 5:49 pm

(AOF) –

Atos

(+10.59% to 3.77 euros)

Atos, which has lost more than 46% since the start of the year, had its credit rating cut by 3 notches from “BB-” to “B-” by S&P Global on Friday due to a deterioration in its liquidity situation. The rating agency highlights that its sources of available liquidity were further reduced in the second half of 2023 with a cash burn of around 100 million euros. She notes that no agreement has been made with the banks to refinance her debt. Shares were down over the weekend.

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Key point

– International leader in digital transformation, information technologies connected to high-performance computing and infrastructures, created in 1997, European leader in cloud, cyber security and supercomputers;

– €11.3 billion activity, divided into 2 divisions: Avidian – digital transformation, big data and security – for 47% of sales, and Tech Foundations – infrastructure and connected work environments for 53%;

– At the end of 2023, the value maximization business model through the division of the group into 2 separate entities – Tech Foundations for outsourcing and Avidian for digital, cloud and security;

– open capital (9.96% for the Siemens Pension Fund and 2.2% for employees), Bertrand Meunier presiding over the 14-member Board of Directors, with Nordin Bihmanne as General Manager, Philippe Oliva Deputy CEO and Diane Galbe Deputy CEO;

– The financial situation is under control with €2.7 billion credit facilities covering €1.8 billion needs for restructuring, so management rules out any capital increase but debt rises to €1.45 billion, i.e. a leverage of 3.75%.

challenges

– Strategy aimed at splitting the group into 2 companies, Tech Foundations, for the second half of 2023:

– Tech Foundations: financing for recovery of €1.1 billion targeting an operating margin of 6% (1.3% of revenue in 2022), returns to revenue growth and free self-financing of €150 million in 2026,

– Avidion: repositioning the portfolio and strengthening leading positions with high margins to accelerate its growth to 7% per year until 2026 through a plan of €400 million, with an operating margin of 12% and free self-financing of €700 million,

– at the end of 2023, the distribution of 100% of Tech Foundation’s shares and 70% of Avidian’s shares to Atos shareholders which will then be listed on Euronext Paris;

– Innovation strategy developed in 18 R&D centers with a portfolio of 3,000 patents:

– Unlock innovation through partnerships with university centers (Quantum Computing, Exascale Computers, Artificial Intelligence, HPC, Multicultural Leadership, etc.) in collaboration with other players (AWS, Dell, Google, Huma, Microsoft, OVHCloud, Sparkle…). customers,

– 2 scientific communities of expert collaborators of the group,

– Scalar collaboration program with +50 start-ups;

– an environmental strategy of carbon neutrality in 2028 and halving emissions by 2025 vs 2021,

– Sales of decarbonization solutions, strengthened by the acquisition of EcoAct,

– Investing in hydrogen supercomputers and quantum technology,

– Launch of the first “green” loan;

– Implementation of a €800 million disposal plan resulting from negotiations with Airbus for the sale of 29.9% of Avidian’s capital;

– Profitable growth momentum at Ividian and return to profit at Tech Foundations, 3 years ahead of expectations.

challenges

– Employee attrition rate 21.6%;

– confirmation of commercial dynamics at the end of 2022 – increase of order intake and income by 1.3% based on turnover at 90%;

– 2023 objective of stable revenues and operating margins of 4 to 5%.

– Elimination of dividend for 2022.

Learn more about the IT/ESN sector (Digital Services Companies).

Advances in Generative AI

Digital companies have already started adapting their offers and practices to this development, which combines ChatGPT and information systems. The most developed use cases concern call centers with the intervention of chatbots or, in marketing, to automatically generate text or images. The potential is enormous and Accenture France aims to achieve 30% of its activity with data and AI specialization by 2025. Accenture, the world market leader, has announced a $3 billion investment in the sector over three years, doubling the number of dedicated people. The number of employees will reach 80,000 (out of a total of 738,000). For Capgemini, the French leader in the sector, it aims for 2 billion euros of investment and 60,000 dedicated employees (from 360,000 currently) over the next three years.

Artificial intelligence is now regulated in Europe

An attempt was made to find a balance between the desire to protect the fundamental rights of citizens and the desire not to restrict the development of European start-ups. French and German associations of digital companies, Numium and Bitcom also called for European regulation on Artificial Intelligence (AI Act) to be innovation-friendly for AI in Europe and without overly restrictive regulations, especially for generative AI. The European approach is to impose obligations for high-risk AI systems, rated from low to unacceptable. For the regulation of generative AI (ChatGPT type systems), the EU has established strong requirements for the most powerful models.