‘Our ambition for 2025 will be reduced’: ALTEN’s executive VP on growth
Yannick Tricaud discusses revenue growth, acquisitions and the development of IT services
ALTEN has shrunk its ambitions for 2025 after wrestling with an “upside down” market fraught with complicated macroeconomics, conflicts, inflation and interest rates.
This year, the French engineering and IT consultancy experienced a 2.6 per cent revenue increase bringing it to €3.11bn (£2.61bn), compared to £3.03bn in Q3 FY23, with its international arm representing 68.3 per cent of revenues.
On a like for-like basis, climbing up the revenue ladder proved more difficult, as it grew from €3.02bn to €3.04bn year-on-year, a shy 0.6 per cent increase tempered by disappointing international results (minus 1.8 per cent outside France).
The business did well in its home turf, where revenues rose 5.8 per cent year-on-year, bringing it to €1.02bn (previous year: €963.5m).
The company also shared that while France and Southern Europe are experiencing decent organic growth, alongside activity going up slightly in APAC and NORAM, the UK, Germany and Northern Europe are negatively impacting the group’s overall performance.
CRN sat down with Yannick Tricaud, ALTEN’s EVP, to discuss the company’s growth and vision for the future following the MSP’s Q3 FY24 results.
ALTEN named the macroeconomic environment and cost reduction constraints as the biggest reason for the decline of its European arm.
“Even if our company has experienced an average growth of 11 per cent per year since 2017, way over the US and European markets norm, we don’t live in a perfect world, and the market is currently going upside down,” says Tricaud.
“European macroeconomics are complicated because of current conflicts, inflation, and interest rate augmentation.
“For some months, many sectors like telecoms, banking, finance, insurance, and the car industry have been through important budgetary contractions.
“Our ambition for 2025 will therefore be reduced.”
Journey and mission
Tricaud joined ALTEN in June to further expand and develop the MSP’s IT solutions.
A technology vet with over 25 years’ experience in the channel, he has worked for various major firms like HP, Sopra Steria, Atos, and Capgemini.
When joining Capgemini from HP in 2010, he took over the Schneider Electric account, which he refers to as “the biggest Capgemini account on an international level at the time,” being involved in 32 different countries.
He then joined Sopra Steria as CEO of Infrastructure France.
“It was a culture that was completely different from HP, as Sopra Steria’s was entrepreneurial compared to one of a big corporation.”
He later went to Atos, where he became the group’s EVP in Southern Europe.
When he started at ALTEN, he was given something more important than a mission, a challenge.
His task? To develop ALTEN’s IT services offering around the world.
“As of today, two out of three of our total activity is in engineering, while a third is in IT services,” says Tricaud.
“ALTEN currently employs 20,000 staff in IT services and 40,000 in engineering, but this number will go up to 60,000 before the end of the year.”
On November 5, ALTEN announced a binding agreement to purchase Worldgrid from Atos.
The acquisition means a lot for Tricaud, as he was supervising the consulting and engineering services provider when working at Atos.
“They offer engineering in nuclear power plants and railway, but also IT services in system applications and products in data processing (SAP) and salesforce.”
The 60,000-headcount target will also be achieved through organic growth, as the company is constantly looking to reinforce its workforce.
“We can now compete in size with other players such as Accenture, CAF GMX, Sopra Steria, TCS or Wipro,” states Tricaud.
But while the company is expanding its IT services, IT consulting companies on the other hand are getting involved in engineering, with for example Capgemini acquiring Altran in 2019.
Evolution through acquisitions
ALTEN operates in more than 30 countries, a list which “will certainly expand” through its “acquisition plans”.
As of 30 September 2024, 67.3 per cent of ALTEN’s total revenue came from its international operations.
Europe (not including France) represented most of ALTEN’s international turnover (46.7 per cent), followed by NORAM (11.8 per cent) APAC (8.4 per cent), and other parts of the world (0.4 per cent).
Tricaud adds that, contrarily to their competitors, “ALTEN is focused on developing the local market of the countries we’re involved in, as we get into these countries through acquisitions.”
NORAM is a market the executive VP is currently focused on, as he wants to do “more acquisitions to gain in maturity and activities in the US and Canada.”
Even though the company is on a constant quest for expansion, Tricaud happily reflects on the size of its APAC market.
“Some acquisitions brought us certifications that very few companies have, such as CIeNET, a company that works in engineering and IT services of connected vehicles.
“Only five companies in the world are accredited Google third-party laboratory (3PL), and ALTEN is the only IT consulting company with it.”
The group arrived in the UK in 2019 with the acquisition of Quick Release, a product data management company for automative businesses, and has since grown its influence through the acquisition of the Methods Group, a managed network provider and cloud-managed services company, in 2022.
At the time of the acquisition, Methods was only working within the public sector.
Tricaud’s goal was to diversify its activities and be more involved in the private sector.
But ALTEN’s buyout frenzy doesn’t stop there, as the company is now looking to acquire more smart platform companies (SaaS, sap, e-business, etc.), notably in Eastern Europe and India, and in the US for data and AI.
AI and data
ALTEN has recently been praised by US-based vendor Microsoft during its latest AI event in London.
“Satya Nadella [chairman and CEO of Microsoft] opened his keynote with five logos showing the key players in AI and data.
“Among these five was ALTEN.
“This endorsement is more proof of ALTEN’s ‘techno disruptive’ nature and our involvement in the future of AI and data treatment.”
Looking to the future, ALTEN is serious about its AI journey, as it will make formation journey around AI mandatory for all partners in 2025, training them on how to take advantage of GenAI, but also the ethical lessons around compliance.
It has also created an innovation department, made of around 350 people who do research about AI solutions to answer their partners’ needs.