Thoughtful, prudent, and effective — the way Alten is run reflects the temperament of its excellent, down-to-earth founder, Simon Azoulay.
The Paris-based engineering and IT consulting firm — Europe’s largest and third-largest worldwide — puts substance before show. It always reports bad news first and doesn’t dress up the numbers or chase private-equity daydreams.
It’s not as if bad news were a regular occurrence, though. Alten has a stellar record in cost control and growth. Over the past decade, it has tripled both earnings and revenue, earning double-digit returns on a fully self-financed M&A strategy.
That scorecard is being tested. Consulting firms everywhere are feeling the chill, especially those tied to industry and autos. When manufacturers stop seeing the road ahead, they hit the brakes on R&D.
Alten can’t escape the slowdown, but it’s steering through it well enough. In the first half of the year, revenue held steady while operating profit slipped just 5.8%.
Eighteen months ago, investors priced Alten for double-digit growth. Now they price it as if it were going out of business. The company trades at half of annual revenue and barely seven times operating profit, near multi-decade lows.
Multiples this cheap were last seen in March 2020, when panic froze markets, and then during the 2008–2013 slump. Yet Alten has been here before. It emerged from each crisis stronger, not weaker.
This time again, it enters the downturn with a fortress balance sheet, a flexible cost base — the beauty of consulting — and a taste for opportunistic deals.
True to form, it’s shopping while others sulk. Its latest purchase is Worldgrid, a nuclear-plant software unit bought from the dismembered Atos for just 1.5 times revenue. Also true to form, Mr. Azoulay still called it “a little expensive.”
If Alten ever paused its expansion — it won’t, but let’s entertain the thought — it could flood investors with dividends. Payouts could reach €300–350 million, against an enterprise value of about €2.3 billion.
But defense has never been Azoulay’s style, and he’s made it clear he’s still hunting elephants. India is next in his sights as a gateway to the U.S., where Alten already has a strong foothold.