Atos split plan and CEO exit scare investors

PARIS (Reuters) – French tech company Atos spooked investors on Tuesday by announcing a plan to split its business and sell assets, which, along with the departure of its CEO Rodolphe Belmer, sent shares down 25%.

The departure of Rodolphe Belmer, who took office in January, follows weeks of reports of a company restructuring on the board.

According to people familiar with the matter, Rodolphe Belmer and the board of directors did not agree on the fate of the BDS cybersecurity division, as he wanted to sell the activity and the board of directors wanted to keep it.

The activities of Atos, including the production of supercomputers and software used by the army and the Ministry of Finance, are considered strategic by the French government. Former Prime Minister Edouard Philippe is on the board.

Rodolphe Belmer’s departure was announced an hour before a long-awaited “capital market day” that investors hoped would restore confidence after a series of setbacks that saw Atos’ market value plummet by two-thirds over the past year.

Rodolphe Belmer, former head of the satellite company Eutelsat, will leave Atos on 30 September. Atos shares shed as much as 27% in early trading in Paris and fell nearly 20% at 0742 GMT.

Atos plans to split into two publicly traded companies and said it has appointed two deputy CEOs, Nurdin Bimane and Philippe Oliva, to lead each.

The split will “discover value” as part of a larger plan estimated at €1.6 billion in 2022-23, the company says.

Atos will sell non-strategic assets worth about 700 million euros, Rodolphe Belmer told reporters on Tuesday.

The Group has already sold its 2.5% stake in payment company Worldline as part of its sale plan, raising EUR 220 million.

As part of the decoupling, Atos plans to unbundle and merge BDS with its service operations, including those focused on helping customers move to the cloud.

These joint operations, dubbed Evidian, generated revenues of €4.9 billion in 2021, up 5% year-on-year, and an operating margin of 7.8%.

The rest will be declining and loss-making IT infrastructure management services, which last year totaled 5.4 billion euros.

Atos plans to return to the growth and profitability of these businesses by 2026.

Asked if he would benefit from a shareholder-approved severance package if the CEO abruptly left within two years, Rodolphe Belmer replied that he had offered to leave with nine months’ salary.

The former head of Canal+, owned by Vivendi, Rodolphe Belmer promised a fresh start for Atos. His appointment was due to a loss of investor confidence due to accounting errors and a failed attempt to acquire an American group.

Weakness in Atos’s stock has left the company vulnerable to M&A rumors. On Monday, the price fell more than 10% after the publication of a report on the group’s future strategy in the media.

(Composed by Miriam Rivet, Mathieu Rosemain, Tassilo Hummel, and Nicolas Delam; French version by Augustin Turpin, edited by Keith Entringer)