The IT consulting company is down by about 80% year-to-date, the shares traded at a 30-year record low level amid uncertainty and lack of investors trust around its restructuring plan.
On Thursday, Goldman Sachs downgraded its rating on the company to “sell,” arguing that its low visibility and weak financial profile boded a long way to recovery.
A minority of Atos shareholder has lost confidence in management and has called chairman to resign.
Cyril Charlot, founding partner at Sycomore Asset Management, said that the downgrade shows the group “lost the trust of markets and investors”. Furthermore, he added that the change in board can help to rebuild investors confidence. As he see,
The main problem of the company is that it is badly run, profit margins, sales growth are below industry averages.
Atos has been struggling to rebuild investor trust for months, two management changes have already taken place, moreover, the ratings agency S&P has reduced the company’s debt to junk level.
As the company reported, the sales improved in the second half and met expectations, but it has accumulated losses of about 555 million euros. Due to the positive outlook of cashflow generation, this will expectedly decrease to 450 million euros in the full year.
Full-year operating margin is lowered to 3%, compared to previous forecast of a range of 3% – 5%.
Atos presented its restructuring plan which splits the company in two groups, with the aim of separating and combining its most profitable assets. The company secured €1.5 billion, which is going to cover the investments and restructuring costs for the entities.
Initially, Atos had said a sale of €700 million worth of assets would be enough to finance the restructuring plan.
Due to the uncertainties and weak financial profile, the investors have put considerable pressure on the group in recent months. The shares are traded at a 30-year record low level:
Source: Reuters