ATOS, the largest decline in the CAC 40 index at the close on Tuesday, October 22, 2019 –

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(AOF) – ATOS (-3.5% to 65.14 euros)

The computer group has gone down after climbing 3.24% yesterday.


Strengths of value

– Eighth worldwide and second largest European IT service providers;

– € 12.26 billion portfolio of activities divided between 4 divisions: 51% of revenues in infrastructure and data management, 26% in Business & Platform Solutions, 7% in Big Data and cybersecurity and 13% in secure payments with the Worldline subsidiary;

– Strong positions in the United States and Germany (17% of invoices each), the United Kingdom & Ireland and France (13% each), Benelux and Scandinavia (less than 8%);

– Towards the “pure player” status of the sector, Atos, Worldline's parent company preparing to distribute 23.4% of the capital of its subsidiary to Atos shareholders;

– Quality of management in the management of acquisitions;

– Good visibility with an order book higher than the annual turnover;

– Solid financial position, resulting in a share buy-back program of EUR 2 billion through 2019 and a dividend of EUR 1.70E for 2018.

Weaknesses in value

– Still too high weight of traditional outsourcing activities and lack of competitive advantages in Consulting and Systems Integration activities;

– Disappointing activity in the United States and the Benelux;

– Large differences in margins between divisions or geographical areas;

– Persistent investor distrust following the acquisition of Syntel for 3.4 billion.

How to follow the value

– Advance 2021 strategic plan: financial objectives: organic revenue growth between + 3% and + 4% per annum, operating margin of around 13% in 2021 and free cash flow between 1.2 and 1, 3 MdsE in 2021 / operational objectives: growth in digital, expected at 40% for 2019 against 30% in 2018 with transfer of customers to the orchestrated hybrid cloud, rise in power of connected objects (target of 3% of revenues in 2021 then 10% in 2025), a 60% increase in the offshore rate in the Business & Platform solutions workforce;

– Expected acquisitions in cybersecurity;

– Objective 2019: Organic growth in revenue from 2% to + 3%, increase in the operating margin between 11.5% and 12% and cash flow close to one billion euros;

– Speculative character strengthened since the total exit of PAI Parners, although Siemens retains nearly 13% of the capital, with a commitment of duration until 2020.

Computers – ESN

The ESN sector (digital services companies) is growing, driven by topics such as cybersecurity, cloud, big data. The sector targets 100,000 hires in three years in France. The turnover rate of employees is very high in these companies, which must attract a highly courted workforce. In fact, given the needs, the talents available on the market are insufficient. This challenge of human resources is a real challenge for the sector, which has 212,000 employees and represents a turnover of 25 billion euros. Companies play on several levers to distinguish themselves: the salary but also training policies or quality of life at work. A large number of companies have set up telecommuting or hired a “happiness manager”. Some are also betting on external growth, which not only provides technology but also talent.


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