Monday, 17 November 2008

Atos Origin - Vive la revolution! (Encore)

(By Anthony Miller) Atos Origin has despatched its CEO for the second time in a little over a year. In a surprise coup late yesterday (Sunday), the company announced that France’s former finance minister, Thierry Breton, is to take over as CEO and Chairman of the Management Board from Philippe Germond with immediate effect. Breton, who had held senior positions at Bull, Thomson and France Telecom, will consolidate his power as executive chairman when the company votes to convert to a Societe Anonyme at the next AGM. Germond took over from long-time CEO, Bernard Bourigeaud, in Oct. ’07. He joined Atos from Alcatel in Dec. ’06 as head of North America and Asia/Pacific and was promoted to Deputy CEO and board Vice-Chairman in June ’07.

Atos has been wracked with boardroom fighting for much of the year after activist investors Pardus and Centaurus looked set to break up the group. See our 26th May post - Atos Origin turning from farce to tradegy - for some idea of how public this fighting became. ‘Friendly’ private equity player, PAI, took an 18% stake in June this year though this has apparently increased to 22%, outweighing Pardus/Centaurus’ 16%. Like compatriot Capgemini, Atos is undertaking a painful restructuring programme, but it seems the board believed progress was too slow. Investors appear to be elated at the change as Atos’ stock was up 12% in early trading.

We’ll have to wait and see what new direction Breton takes the company. In the press release (see here) Breton referred to Atos having “solid positioning across promising markets in 40 countries”. Frankly that’s part of the problem. With over 75% of Atos ~€6bn sales coming from France, UK, Netherlands and Germany/Central Europe, you have to wonder how much ‘promise’ there really is in the other 30-odd countries. Atos is also severely undernourished offshore, with just 4,000 heads in low-cost centres, mostly India. Cap has some 20,000. But let’s hope that the changing of the guard doesn’t force Atos UK CEO Keith Wilman to steer off course after leading the group’s growth last quarter (see UK leads Atos’ growth).

Press comment seems to suggest Breton will not break up the group. The FT reported a wry statement from someone ‘close to the situation’ that “Thierry Breton has never broken anything up in his life”. In an exquisitely timed interview in the French press this morning, Cap CEO, Paul Hermelin, apparently ruled out large-scale acquisitions, and didn’t think he’d be interested in any of Atos’ potential cast-offs which he assumed would be the underperforming bits. Just a couple of weeks ago Steria abruptly jettisoned its France CEO (see Steria profit warning sees off France CEO).
What all these players most need now is stability. But what we seem to be getting instead is more Vive la Revolution!

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