Interview with Simon Azoulay
Chairman and Chief Executive Officer
What were the highlights of 2016 for ALTEN?
ALTEN maintained and reinforced its position as a key player in the Engineering and Technology Consulting sector, with 24,000 employees at end 2016, including 21,300 engineers, revenue of €1.74 billion (up 13.5%) and an operating profit of nearly 10%.
In a market with mixed performance, one of the most significant facts was the acceleration of international development, which now represents more than half of ALTEN’s revenue. The Group has therefore grown in all geographic regions, including in France where we are the unchallenged market leader with more than 9,500 engineers, despite a fierce competitive environment.
Operating margin, although still impacted by acquisitions, increased in practically all geographic regions. Operating margins of 2014 and 2015 acquisitions improved and created value.
Since the beginning of 2016, there have been ten acquisitions, nine of which are outside France, in Germany, Italy, Romania as well as North America and India.
Lastly, the Group launched the optimisation of the organisation in France to improve synergies and the use by international entities of support structures in France (Technical Division, Recruitment, Quality).
What can you say about the activity of ALTEN’s markets?
The Group has always had a strategy of maintaining a balanced presence on the five business sectors.
The Land Transport sector confirms a particularly high level of activity with manufacturers and equipment suppliers in France and Sweden, as well as a probable improvement with German manufacturers. There are other major prospects offered by projects relating to autonomous and electric vehicles, control of emissions (Nox, CO2), infotainment and security. We also note an upturn of business in the rail sector.
Business in the aeronautics sector is characterised by the launch of new manufacturing engineering projects with AIRBUS. For ALTEN, the challenge is not to miss the production ramp-ups at AIRBUS and to support supplier partners in their development. In the Space sector, the “Launcher” business has risen sharply.
The downturn in the energy sector continued in 2016, in Oil & Gas and Nuclear. We can, however, expect the market to gradually stabilise in 2017. Conversely, our Life Sciences business (Pharmacy and Medical Equipment) has been steadily improving.
In the Telecom sector, we are observing a gradual pick-up of business with operators and equipment suppliers in Europe. In 2017, the trend is pointing to a slight growth in business.
Lastly, the growth momentum initiated in 2015 in the Bank/Finance and Services sectors both in France and on the international market (UK, Italy) has continued and has even stepped up.
What are the main strategic focuses for 2017?
Again, the ALTEN Group’s strategy is constant: first of all, we maintain our top-end positioning with respect to the excellence of our engineers, thanks to our ability to recruit the best profiles, in particular through the high added value of the projects that we propose to them. Our commitment to the engineering culture and the breadth of engineering professions, upheld since the inception of ALTEN, remains one of the keys and a major focus of our development.
Furthermore, and in accordance with our principle of profitable growth, a value that is just as fundamental for the Group, we are deploying our organisation in all the countries where we operate, with two objectives: reach technical and managerial maturity everywhere by optimising cross-cutting structures, and reaching or maintaining a critical size of over 1,500 people per country and per region.
We can therefore conclude that ALTEN has already exceeded its strategic plan for 2016-2019, which projected 24,000 engineers by end 2019. International business will represent more than 60% of revenue in 2019.