Alten Finishes 2021 with an Indian-like Growth Rate

/ January 30, 2022/ Alten, Financials, France

Alten Closed 2021 with a 20% Growth

Alten finished 2021 with an India-growth rate. For the third consecutive quarter, Alten has an organic (cc/cs) revenue growth close to 20%, reaching 23.2% in Q4. The company benefitted from favorable comps (-17.4% in Q4 2020) and HR decisions.

Alten Continues to Attract Talent

In 2020, despite the demand meltdown in commercial aviation and automotive, the company minimized lay-offs, largely thanks to government packages in France and Germany (1.1k engineers). Alten also agreed to lower its utilization rate by 1 pt to prepare for growth return (~300 engineers). In 2021, Alten recruited actively, adding a net 5.0k FTEs, a record for the firm. Despite its active recruitment, Alten could not hire as much as it could; its utilization rate was 92.9% in Q4, above its 92.0-92.3% target. Client demand is back overall in a market with a lack of talent, resulting in wage inflation and rising attrition (~27%).

2022 Looks Healthy

2022 looks favorable for Alten. Headcount is at its highest (45.5k), and Alten attracts talent. Client demand remains strong, with automotive in France and Sweden and commercial aviation still not back to the pre-COVID level. Commercial aviation is improving faster than the company expected. Alten continues to acquire competitors at the right prices. The company is very reluctant to ‘over-pay.’ It acquired ~€160m in revenues in 2021 and already has six firms in its M&A pipeline for H1 2022. The company can afford its growth aspirations: it had at the end of H1 2021 a net cash position of €163m.

Alten is even changing its position slightly on offshoring. The company acquired two firms in 2021 addressing the US market, with a delivery center in India and China. In total, Alten acquired 2.8k FTEs. We estimate that Alten now has ~5.5k employees in low-cost countries. That’s 12% of its headcount. Not a lot but a start.

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