Part 2/2 : Paul Saleh as Pinnochio in Q&A session of his conference call to Atos & Eviden top managers on January 19th – Written transcription [Exclu-blog]


This second part, of the Paul Saleh call to his 732 Atos top managers is fully dedicated to questions and answers session (Q&A), where managers raise questions to Paul or Carlo. Please know this transcription has cost me a huge amount of time and money as I used software and manual rewrite. There will be soon a cagnotte if you want to support the blog to keep doing such work.

At the end of the session, Clay Van Doren who attended the call instead of Nourdine (Clay Van Doren is TFCo n°2 head manager), raise a few questions about TFCo side and at the same time close the call.

We are comfortable disclosing this part as Paul says it can be disclosed publicly. Even though, we made our best to replace manager’s first names by “A Manager” all the time it was possible without disturbing the understanding. Every time a customer name was quoted or any indication that could identify the customer, we replace customers names by “XXXXX”

What we can feel in this second part is that the management is astonished by the S&P downgrading just announced something like 2 or 3 hours before the communiqué release (actually the 3 steps were not announced but Paul, and you can imagine at that time, note only Paul didn’t mention the 3 steps downgrade but he spoke of possible upgrading of the rating as soon as BDS deal would be signed. So these 732 managers would never imagine that 20 days after the call, a second 2 steps downgrade would occur, whereas they were not even informed by Paul that the downgrade was 3 steps.

Comme on dit en Français, ça doit être la soupe à la grimace chez ces 732 messieurs… Et la sympathie envers Paul remercié comme le Messie avant chaque question (ou simple fayotage avant plan social?) sévèrement entammée !

PART 2/2 : Paul Saleh reply to his managers questions

Same remarks as previous article, we contacted Paul Saleh twice to get comments about this call and we didn’t get reply at all.


Thank you for all for this transparency and this very clear status, even if we still know the level of uncertainty, as you explained. What would be good for us, for our team is, could we get all this wording, all your pitch in writing for us to be much more comfortable when we are facing customers just to avoid miscommunication, let’s say. We have to be precise and for us to be precise, you know, it’s not our job to be,… we are not CFO guys.

CARLO : 0:19:21
No, no problem.

We will do this and I propose that we add two elements.

One, the script that we call the official script and then we’ll give you below what you can say orally to specify. There are things that are always complex to put in written. So, we’ll give you the official speech plus what you can say orally when pressed or when pressed who don’t want to know more. You’ll have it.

Good.  Do you know when?   Next week?

I think by early part of next week we’ll have it to you.


I think what I would suggest to you that what you’re going to see and I think we’re going to try, to try to see, I’m turning to Clay, Mah (?) and others, try to get it to you on time for the weekend and maybe early part of Monday because what’s going to happen is that if the rating agencies take actions, which I believe they will, we do not want to have you unprepared come Monday to just really deal with another set of questions that may come from procurement offices or they may come in from clients just trying to seek a little bit like, oh, what does that mean.
Right? Even though it may be expected, any new news tends to be on the negative side these days. Robin? Andy, sorry, Andy.

Paul is okay.

A MANAGER (called Paul) :
Hi Paul, probably a naive question, but is there any reason that we can’t extend the terms of the bank ahead of time?

Yeah, I think what it is, right now we had our 1.5 billion, right? We had the right to extend it to six months period all the way to January 25. After that we do not have any rights. We have to get all the banks to agree to come up with a new refinancing. It has to be a new refinancing to qualify for all the things that we’re doing with them. So they all have to work hand in hand and agree to basically the same thing as an extension, but it’s in the form of a new financing that we want to push out until 2027.

PAUL (the manager) :
Thank you.

I guess an observation, I heard some worries from the client I looked after this week and I actually reached out to them and they were very grateful for the proactive dialogue to hear from us. I think I’m sure everyone’s doing it, but it’s really important that we own that dialogue with the client rather than them getting it from elsewhere. On what you’ve just said out, is there anything we can’t talk to the client that you’ve just gone through? Is it any bit sensitive or is it all part of the story we can talk to them about?

Everything that I said is absolutely, you able to share. Absolutely everything !

[Ndlr (blog) : Thanks Paul to allow me to share this]

Hi Paul. I have a question. I’m working in BDS, MCS, SAIDs for the defense and the airspace and our customers are expecting long term stability. In the last year or so we had a lot of changes in the management team. What would be our message to convey stability going forward? Is this something that you are considering as part of the messages that you will share with us? Thank you.

PAUL 0:22:55
Yes, I think just to, thanks for your question. I think it’s obviously something that our track record doesn’t really support a lot of confidence in whatever we say about the future that we’re done with management changes of sort. But I would tell you that both Carlo and I are committed to lead the effort with all of you going forward. As far as the mission critical kind of work that is being done, I think I do believe that all the clients right now recognize that going to Airbus, if that transaction is going to complete over the next couple of months, I think that’s going to be perceived as a positive rather than just uncertainty.

And Paul, I would like to add something here. When press and customers ask me that, I also tell them look at the operating team and the management that works on you and the stability you have there because I think that the turmoil has been more at the level of the group than at the level of the operations. Just look at it in each and every case, but if you have this, this can help to show there is continuity there.

Does it impact our ability to procure equipment from our suppliers given the credit line discussions?

Yeah, I think it’s interesting you mention that. I think I do believe that we’re going to have to brace ourselves to a lot of clients being a little bit more nervous suppliers, being more nervous about extending some terms to us about equipment given our financial situations and wanting to have potentially better terms or shorter terms. So we’ll have to deal with that.

That’s one reason why, again, we’re just trying to maximize basically the cash usage that we have right now, making sure that we’re collecting on time. This is where we just really are cautious about where we’re spending money because the moment money goes out the door, we need to make sure that we have enough cash to go through near term, all the obligations as I mentioned that we have.

So right now we haven’t seen any concern expressed.

We’re working over on our commitments that we have made to vendors, just trying to fulfill them. And we’re going to have to watch our cash position tightly until we get the resolution from the banks. So we will also have to add the additional capacity to support the business during this transition period. And so we’ll see where we get with them on that.

Thank you very much for this direct communication, which is much appreciated.

I am literally trying to sign a renewal of a contract agreement with XXXXX.  I need to get it signed today, but they want a support letter or warranty letter coming from Atos Group. And they didn’t want to hear about splitting Atos and Eviden together, I guess, because they’re a lender. That’s right. So I guess I’m a bit worried about the, besides the fact that I need to get this warranty that may land on your desk today. I’m a bit worried about the rating agencies, because even though they signed the contract, if the rating agencies change the rating, and I’m not quite sure when this would happen, that we still have the ability to sign more business with them. They have internal mechanism where they rate the suppliers. And when the suppliers go below a certain rating, they have a business freeze. I recognize that.

PAUL :  0:27:08
First of all, thank you for that. A couple of things. Number one is we’re dealing right now with the senior people at the bank. I deal with Alan Pappias, who is like his number two at the bank itself. So we’ll have that dialogue about it. He’s well aware of the potential for downgrade. If the downgrade occurs, it will occur within the 24, 48 hours. I think that’s what my understanding is, if they take that position. I realize that it’s going to put more pressure on us getting business. I am not confused by that, as I mentioned, because a lot of people would be, you know, read that as another negative news, per se.

But if we’re going to have to point out to certain areas within the release where even the rating agencies are going to be pointing out the fact that they will upgrade us again if we can go through the BDS transactions as well as the bank refinancing. It’s less about whether the EPI transaction takes place or not. It’s more about whether the refinancing and the BDS transactions occur. But we’re there to support you and I will talk to leadership. We’ll reach out to them sometime early next week. That was the plan anyway.

Thank you very much.

And by the way, Carlo and I are just really offering you also at any point in time, if we need to get personally involved with anybody at board levels or at senior levels, C-suite to reinforce the message so that they hear it directly from me or from Carlo, we are just absolutely available to do so.

And by the way, I wanted to add that as I, as Paul pushed me to do, I think it’s important from the February onwards, I’ll be more on the road to be in the US, to be around Europe, to be probably in Canada as well in order to try to do things personally. I just want to add, I think it’s important that we all accept that our customers as us have rational and also emotions. So the more we are present physically, the more we do that with them, the more it will help. So you will see me on the road more and more to be of support and do whatever I can to convey the messages with you.

A MANAGER : 0:29:35
Hi Paul. So thank you very much for this really helpful conversation and all the information.

They will help us in our discussions with my customer, XXXXX, tomorrow. Next week we have our meetings with the global procurement head and I feel well prepared.

But to be honest, I don’t feel well prepared when I talk to my daughter. And if she’s asking me, is there risk of getting artists getting bankrupt? What’s the answer?

PAUL about debt and group possible restructuration :  0:30:05
I think there’s a variation on the theme.

I think, let me just actually, it’s interesting you mentioned that, but for the interest of the team, there was some news at one point that we were going to what they call an ad hoc mandate. And so if you read it in the press, let me just really demystify it for you. What it is, is that you’re going to a court that appoints a, basically think about it as a mediator. And the role of the mediator is just really to facilitate conversations between two parties.

And so if, for example, things stall with the banks and we feel that the benefit is to just really go and have a mediator that can kind of accelerate the discussions, because so many times that’s what their role is, then you just really do that. That doesn’t mean that, hey, we’re just in trouble, but it is a mechanism used for that.

There’s another mechanism that people mention, which is called consolidation. And what that means is that, again, it’s a little bit more advanced in a sense that the mediator in the first place, and this is a place where they are actually that party that is acting on behalf of the tribunal in a sense, has a little bit more authority to force people to do certain things. So that’s the second level of, you know, it’s like in war game, death com one, death com two, or whatever you want to call it.

The last one is just really what they call safeguard, which your daughter’s asking, hey, is there a possibility that the company may find itself in that predicament? It’s just also it’s only when all these other type of activities have not borne fruit and you are just absolutely stuck. That is when the tribunal, in a sense, or discussions come up with a very quick solutions to just really try to bring everybody together. But then in this case, is there forcing the outcome in all cases?

Let me just make sure that you understand a bankruptcy in the form that people are talking about is one in which the company re-emerges very quickly with all their with a different set of creditors, where the bondholders and the people have given, you know, extended debt to the company with what they call get their debt converted into smaller amount and another amount in equity. Right.

So that’s not that it’s not the elimination of the company just stop existing. It’s just really exist in very quickly with a different form of a capital structure where the debt holders become owners and their obligations get reduced.

And there are a whole lot of example. I’m just giving you there are a lot of example of companies that have just really emerged well and perform extremely well post that process.

So that that we want to go there is just to give you the sense that we’re trying to find a solution, as I mentioned to you, that is really reasonable for everybody, which is the one that is currently on the table.

But there are a few mechanisms along the way that can be used to just really expedite a resolution.  So you can tell your daughter that is not right now in the cards.

And right now, the management have confidence that they’re going to be able to steer the ship and avoid having to use that mechanism.

And again that’s a difference than total bankruptcy where you just really liquidate everything and the company’s to exist. This is what we’re talking about. So if you’re talking about Sauvegarde, the company still exists, but the capital structure is reorganized. It’s much more like every organization that is if you think about it.
Hopefully you can talk to her.

I don’t know if she’ll understand.

if she doesn’t understand, fully translated the answer is no.
I think that’s right. Now the company is not going to get there.

A MANAGER :  0:34:05
OK. Hello Paul. Before we go crash, I was wondering about how safe is the BDS plan and whether there is a deep line behind it and this kind of things. Is there any rebound we should we should look at? You understand that?

Yes. No, I think actually, of all things, the BDS pipeline is very, very strong.

I do believe that one of the elements that was a little bit impacted was more on the cyber security where some of the because of the separation of the two businesses, some of the business that used to come directly from TF had, you know, dried up a little bit. But if I look overall, particularly on the HPC side or the advanced computing side, I think the backlog has been as strong as it’s ever been. Right.

So and then for the performance for 2023, the business has been really very close to performing as they had anticipated. So now I think we’ve had our reviews with Airbus and then I think we’re entering, as I mentioned, into this confirmatory due diligence. And then sometime next week, we will start the management presentation. Carlos been really meeting with the management team and guiding them through it. And I think it will go well.

The question was that was on a plan B.
Paul Apologies was asking if by any chance it didn’t happen. Do we have plan B? Sorry.

I don’t know that it’s one of those things that we already activated a plan by selling them in the first place. I do believe that right now we have strong enough confidence because the board of Airbus has already seen this thing, has already been comfortable in showing the pricing in the marketplace.

And then a lot of the a lot there’s a lot more momentum behind this thing to occur. This is a business that’s a really strong and very valuable business. So I’m pretty sure that that’s goes go through if in the next couple of if we sense that there is something wrong, which I don’t believe in this case will happen, then we will huddle very quickly as we huddle very quickly in the December time frame to get a reach an agreement with Airbus. We’ll find another solution.

Hi Paul. Good afternoon.

Question as one of your major shareholders with 500K stocks in my wallet. I’m also looking at the future.

If you look at future requests, a lot of our customers are asking for ratios in their request, financial ratios like solvability and liquidity. Is there a plan for the future how we can meet debt request answering tenders or other requests from our customers?

Because often if you don’t can positive answer that questions, you will not go through the next phase. So is there a plan?

Yeah, no, absolutely.

I think what you will find out very quickly is that we are going to meet all of our ratios for this year anyway, even though we have confidence with our banks for a debt to cash flow ratio of 3.75. And we will be within that fine and no problem there. As far as other ratios, we will provide those in due course, I think, particularly as we report our financials in November, sorry, in February of 2025.

Right in the next six weeks or so we will be reporting our results.

PAUL about goodwill major impairment to come on February 29th :

But the by the way, actually, one of the things I’m just teeing up with you because it’s already in the marketplace so that you understand it. That’s going to be another we end up we have a whole lot of goodwill on our company in our company with a lot of goodwill on our books, you know, because of the acquisitions that we have made over time, including Syntel and so many other bull and others. And as a result of that, we may have to impair that goodwill, meaning it’s just really it’s a this is the amount that usually that you pay over the value of a business when you buy it, if you pay a premium for it. And so given where the stock price is today, we may have to write it off.

[Ndlr: (blog) The Goodwill impairment of a subsidiary has nothing to do with the group stock value.  This is totally inaccurate statement, or to say different, a big lie, just not avoid to mention to have kept these goodwill in the past were Meunier’s illegal behaviors to keep these unjustified goodwill in Atos books.]

And again, it’s an accounting entry rather than economic really touching liquidity or anything like that. I mentioned that just in case I you know, you hear something about it.

A MANAGER 0:38:48
Hi, thank you, Paul, again, to repeat the openness and taking the questions that you’re taking much appreciated.

Similar question to Jeffrey earlier short-term deals where we’re coming under pressure to demonstrate that we are financially viable. Is there a mechanism we can address through to you, which we can do repeatedly and quickly because obviously what we don’t want to do is to lose the short-term business. And if we can.

But typically the processes in Atos Eviden or so to get any approval up to the senior level to do anything significant to reassure customers. Is there a way in which we can shortcut that process so we can address these things and not lose business over the short term?

I think I mean, obviously that makes a whole lot of sense. I leave it with Carlo and you know, if I think maybe we should just really have a way to look at it to see if we can shrink that review process.

I have there’s a lot of things, by the way, that Carlo and I are looking at. I think we didn’t get to it yet, but we’re going to try to simplify life. If I really look at the time that we’re spending internally talking to each other and comparing notes with each other instead of spending time with the client. I think it’s a rebalancing act that we have to make.

And so we’re trying to simplify our governance internally and some of these things, Tom, if you can suggest things that could really help. By all means, we’re going to just really be open to it. We’re going to streamline things that are so cumbersome these days.

Paul, if you agree, I think we need another 10, 15 days to go to complete this work and governance methods to our meetings, to our approaches and to rainbow and see what we can simplify. We are clearly working on this and the main objective is to see to simplify it for the sales and pre-sales teams that need to stay with customers more and more because of the situation.

I would propose if you agree that we have another meeting like this in 15 days so that we say what we are doing in this direction, because we need to do that. We’ve been doing it well. It’s as important as doing it fast because we do it wrongly. So we need, I think, 10 to 15 days to finish the work.

PAUL 0:41:09
I want to go back to Tom’s ask. We’ll put it on the note here and then follow up, Tom, and just making sure if you can shoot to me at least a note to what exactly is slowing things down typically or what exactly, I’ll just make sure that we address that. OK ? And I think I would like to build on something. I care about you. Yeah, I want to build on something. I know that’s not the intent.

But we’re also looking, Carlo and I, away on the commission side to also just really bring the two teams together from TF and for evident on some joint pursuits because everybody’s just always want to be taking credit or saying, well, if I don’t get credit for it, I don’t want to spend my time because my time is so precious.

We’re trying to find ways to just really bring us so that we’re less, less trying to sort things through internally, but just align everybody’s interest to just go serve the customers and the company to win. So wait for us to come back with something for you to so that you be incented properly as well.

A MANAGER 0:42:15
Hi, Paul and Carlo. Thanks for your openness and transparency. I appreciate this communication.

I think this is in continuation to Tom’s question. We are, I’m working on a very large deal with the Ministry of XXXXX in XXXXX that both of you are aware of. And we are starting the contract negotiations on Monday morning. So we really need this communication, whether the in writing and the oral ones to be ready over the weekend.

And we’d appreciate if we can have sort of a direct line support through those two days because I’m just now getting more worried if this credit ranking is being, is becoming public before we start our client meeting for such a large deal on Monday it will even make our…

Call whenever you need. Call. You’ll have it. Call whenever you need.

and I’m available. I’m available also. All over the weekend for you. So call, Carlo and I will make time this weekend.

CARLO  2 0:43:18
As I said, let’s try to see when you seek is the right moment, I would fly for Canada at night and come back the night after if needed for that. So you just, we just agree. And, you know, I’ll hope on a flight to be with your customer. This is a very important deal for us.

I really appreciate it, Carlo.

We say that also at a time at XXXXX it is as cold as can be.


It is. You didn’t tell me that, Paul. You didn’t tell me that. Come on.

Just speaking from XXXXX, currently XXXXX degrees. Celsius.

Lovely city.


Marcus ?

MARCUS  0:49:14
Yes, thank you. I’m heading an operational unit.

So one one remark, Paul, is that I mean, we not only have salespeople in front of the customer, we have like 70% of our staff standing in front of our customers. So we need to also reassure everybody of what you’re saying. So thank you very much. It helped me to transfer this to my staff. One question that I have, I mean, we have a new brand here with EVIDEN. in the corporation and which is, I mean, partly known. But my question is, do we continue now in this situation to promote this brand, for example, towards fairs, you know, broader, broader public? What is the plan regarding marketing? Because that’s what’s lacking it for a year or so since we have the brand. We cannot really, you know, go forward and make it more public. And that’s a very good question.

PAUL about marketing :  [Ndrl : Please note that PAUL is lost when a question is not about finance]

I think you can imagine, with all the things that are happening right now, we’re just trying to prioritize where we spend the money. And so I think we’re going to have to wait a little bit to sort out whether or not what’s going to happen over the next few weeks. Right. For example, if the for example, if the does the deal takes place or not, how is our with videos now being sold? You know, do we use the name just for digital or not?

So there’s a little bit of work to do. But in the scheme of things right now, the priority is such as one as the things that I’ve mentioned to that we need to execute on the back side of it, like the sale of videos and the banking renegotiation. And also to give you are you all of you on the call with enough information that you stand confident, not only, as I mentioned, in front of the client, but equally with the public. [Ndlr (blog): Thanks Paul. Done]

And also equally with our employees as to be able to comfort them because they look to you to see if it’s going to if it’s going to be all right.

And I can tell you it’s going to be all right. And then the third thing is at home also just being in your friends when you go for drinks or meals to be able to also say the companies are going to be all right. I think we’re dealing with a difficult period, but we’ll emerge collectively out of it.

I would come back to the marketing in due time.


Clay ?

CLAY 1 0:51:39
year we’re gonna have to wrap up here. And but I had a couple of questions, a couple of questions I thought that might summarize help you summarize real quick. But before we do that, Jenny, do you have a do you have a quick question we can do and and then we’re going to have to call it.

So Paul, I run the telco and the public sector business for TEFCo and Eviden in the Americas. My question was in the event that the EPEI transaction does not happen and you know how will we be structured as we move forward? Will we continue to remain as two separate units within the same company or any any thoughts on that?

Yeah, I just… maybe again in this spirit of what may have been going so fast that it wasn’t really properly registered. But I did mention that if the EPEI  transaction does not go through, we will continue to just operate as two separate lines of business. Right.

But we are going to take steps. And you’ll hear more from Carlo about it a little bit later when we firm up those plans. We’re going to take steps.

We were thinking about taking steps to leverage the capabilities of the two companies as we are presenting ourselves in front of the clients instead of coming across as two totally, totally distance relative that have not seen each other for so many long period of time. We want to just come across as one in one motion in front of some of the customers, not in every case, but where it’s necessary so that we can continue to serve their needs so that they don’t have to think that we are a totally disjointed.


And there are topics like cloud. I don’t want to take time now, but there are specific topics like cloud, AI, cybersecurity, where we are working in order to secure and reinforce the position seen from the TF customers. So we’ll work on that. We’ll give you, you’ll see strong support in the direction.

OK, we have to draw to close.

Philippe, I see you just came up with a question. If you ping me on IM, I will get you an answer to whatever; to whatever your question. I’ll talk directly to Paul and Carlos.

So first of all, Paul, thank you for this, you know, the sincerity, the transparency. We’ve talked about a number of things we have to do right over the next period of time, right. And to hit a new level of stability.

When do you think we hit that new level of stability, right?

Recognizing there still will be. So when if you would bring it all together, is it kind of the April, May annual shareholders meeting where we think we’ll be in a different spot or if I were to bottom line the various activities?

Yeah, I do believe like if you said to me, for example, hey, when can we are all the fog will lift, for example, right? Totally.

I do believe it’s just going to be probably in the May or so timeframe if I had to guess a little bit.

But I would tell you one thing, though, that would be very encouraging that you will see much faster along the way things that will give you basically clear indication that that fog is lifting. So along the way, there’ll be clear markers.

If BDS transactions is confirmed. I think you can just really again rest assured to to even more so for people inclined that this is moving in the right directions. If the bank can give us where we need to go and that’s progress takes place. It’s just going to be affirming as well.

So all things don’t have to all come together to be totally done. But enough in a sense is like a remodeling of a house. I think you will see that there are enough progress that you’ll feel that the end of this construction period is about to end.

Sounds good.

Final question, which is a little bit TF related because I’m getting pinged behind the scenes. So we’ve talked a lot about the Eviden performance, what we need, but BDS, what do you need from the TF community?

I mean, leaving the wholesale aside for a second. What do you need out of them?

I think it just really I know that everybody was gearing up in almost to just really take a, you know, lift off, so to speak, and just see the transaction take place and and eager to make it happen.

And whatever happened next, as I can tell, but even in case one or case two, whether it goes through or doesn’t go through, what I need the folks to make is just really stay focused and we’ll figure out something that really makes sense for everybody. Not be rattled one way or the other. I think, I think we’ll we’ll be fine.

I think the leadership, particularly of TF, is so critical to our long term success. You’ve done a remarkable job, an amazing job turning around the company, turning on the respect, the perspective of that, what that business can do relative to the competitors, maintaining that pride and commitment to the client. And I think we’ll be fine. We’ll find something that works.

Fabulous. I think if it’s OK with you, Paul and Carlo, we need to wrap there.

All right. Thank you so much again and look forward to our next opportunity just to update you on what’s going on.