Atos has appointed Paul Saleh as its new CEO, its fourth in under two years. In an announcement earlier today, the French technology company also warned investors that its free cash flow would likely fail to reach its target for the second half of this year. The markets reacted poorly to the news, with Atos shares plunging by 16% at the time of writing.
Saleh succeeds Yves Bernaert, sacked by the IT multinational’s nominations and governance committee after less than three months in the job. Atos’s new chief executive would primarily focus on “refinancing the Group’s financial debts”, said the firm, in addition to leading negotiations with EP Equity Investment (EPEI) and Airbus to hive off its Tech Foundations arm and its cybersecurity unit BDS respectively. “Paul is a seasoned leader within the IT services industry,” his new employer added, having previously held leadership roles at Gainwell Technologies, Sprint Nextel Corporation and the Walt Disney Company.
New Atos CEO comes amid restructuring plan
The announcement follows a troubled year for the multinational IT service provider, as it struggles to restructure its business from selling on-premise IT products to cloud-based services capable of competing against US hyperscalers. It plans to do this by investing in its new cybersecurity and data services brand, Eviden, while hiving off the legacy portions of its business. Extra incentive to do so has been provided by a €1.5bn loan the company took out in 2022 and €750m worth of bonds, both of which mature in 2025.
While negotiations to sell its cybersecurity arm to Airbus appear promising, Atos has failed to finalise the sale of its unprofitable Tech Foundations unit to EPEI after five months of talks. Despite a promise by Atos to “simplify” the deal, there are signs that EPEI is tiring of the back and forth, with French newspaper Les Echo quoting an unnamed source that last-ditch negotiations between the two are expected to take place in the coming days. The deal has also proved unpopular among Atos shareholders, whose disgruntled reaction to the move forced the resignation of the company’s chair, Bertrand Meunier, in October.
In addition to its work in the private sector, Atos is considered to be a business of national strategic importance in France thanks to its extensive work throughout that country’s defence industry. The firm is also a major supplier of IT services to the UK government, with the latter acquiring its second quantum simulator from Atos in January 2023.