French tech company Atos facing share slump: New profit warning shocker

Since around mid-2012, French tech company Atos has been facing its shares slump. It is the lowest level for Atos shares, and things are not looking good. On Monday, the company shared its revenue portfolio, a profit warning came.

The company appointed a new CEO, and right after joining in October, Rodolphe Belmer fell into the giant backdrop. According to Reuters, shares plunged 15 per cent in early session trading.

Rodolphe led the issue where profit warning showed a 16.8 per cent drop. If we factor in actual numbers, the shares fell at 32.1, which is 52 weeks low of €31.26 per share. The previous close was €38.59 per share, which was 19 per cent higher.

CEO Rodolphe Belmer was appointed in October and came responsible for making many important decisions to save the company. The tech transformation company is having a rough time coping with the market as share prices are fell to their lowest since 2012. The IT outsourcing provider published the latest financial figures, making headlines in many newsletters.

Belmer talked about the current state of financial insights. He said ‘the obligation to issue a profit warning today due to the significant variance in the financial KPIs.’ KPIs stands for key performance indicators.

But with all these issues came in good numbers too. The IT outsourcing behemoth received a 2.4 per cent decrease to €10.8 billion ($12.2 billion) in 2021’s revenue. Outsourcing via UK’s financial contracts, institution and profit for big data. Big data or high-performance computing with communications project, supply chain challenges came at a reduced number, leading to a not too shabby financial stat.

Belmer said after joining the company last week, "when the figures were being collected and consolidated," the state was looking bad. The insight led to the immediate solution, which is being applied and has a long term effect. Belmer thinks the company can turn around its financial data as "the company has the necessary assets."

Underlying gaps are non-recurring and should be fixed very soon under the reign of the new CEO alongside the decision maker’s support. The previous CEO of Atos, Elie Girard, was quite tainted by the errors made in the financial sheet. Prior profit warning occurred by July 2021 and is still a recurring problem for the company.

Though 2021’s whole yearly revenue came with a 2.4 per cent decline, the company still managed to hold its ground. With a trusted client base for the companies supporting its service, the fiscal year of 2022 will be an eye-opener. Either the company will come in with more red lines in its chart, or the scale will move upward.

Frances blue-chip CAC 40 equity index and speculation led to take over from activist investors. The 2.4 per cent decline will be the cut of $12.24 billion.

Nevertheless, Atos will be going for a ‘stable’ sales period and cutting off the negative numbers from the chart before going up again.

At the moment, each dollar is exchanged for 0.8827 euros on which our transactional numbers are based. ‘Unexpected reassessment’ of the business process outsourcing (BPO) agreement. The BPO agreement with a large UK financial institution has a 70-point basis venture.

The operating margin for Atos forecast had a 4 per cent target, and the company had plans to raise it by 6 per cent. The cash flow margin for Atos is at negative 420 million, which is higher than the previous forecast of positive free cash flow. The current CEO previously led French satellite firm Eutelsat (ETA.PL), so tech company management is not new.

The new CEO predicts to do old school IT outsourcing to restructure the company similar to its initial facilities with a pay-per-use model.