Altran Technologies

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Altran Technologies

251 Boulevard Pereire
75017 Paris
France
Telephone: (+ 33) 01 44 09 64 00
Fax: (+ 33) 0144 09 64 89
Web site: http://www.altran-group.com

Public Company
Incorporated: 1982
Employees: 12,823
Sales: EUR 1.28 billion ($1.02 billion) (2001)
Stock Exchanges: Euronext Paris
Ticker Symbol: ALT
NAIC: 541511 Custom Computer Programming Services; 541512 Computer Systems Design Services; 541330 Engineering Services

France’s Altran Technologies is Europe’s leading high technology consulting company—Altran prefers to call itself “Innovation Consultants”—and is aiming for worldwide leadership in this fast-growing consulting sector. Altran’s army of more than 15,000 consultants, the majority of whom are engineers, enable it to provide consulting support services across a wide variety of industries and technologies, ranging from the physical sciences to electronics, chemistry, automation, information technology, financial mathematics, and modeling. Most of Altran’s work is for major corporations unable or unwilling to gain in-house expertise for specific projects. As such, Altran has placed consultants with automaker Renault to assist in its development of a next-generation Formula 1 racer. The company was also responsible for the design and development for a hydraulic system for the Airbus A350-600 aircraft. Altran has also long been involved in the aerospace industry, completing such projects as the design and development of the Node2 project for the Alpha international space station program. The company’s multi-discipline approach has helped shield it from individual industry downturns, as does its position at the innovation end of the high-technology arena.

As a company, Altran is one of France’s success stories, seeing its revenues grow from about EUR 50 million at the beginning of the 1990s to more than EUR 1.2 billion in 2001. The company is aiming still higher—notably with plans to expand into the United States and Asia in the early years of the new century—and forecasts growth in sales to more than EUR 2 billion by 2003 and a leap in its number of consultants to more than 40,000 by 2005. A unique feature of Altran is its extensive, yet highly independent network of more than 130 subsidiaries across 14 countries, which cooperate through technology sharing and other support services guided through central management but otherwise operate more or less autonomously. Unlike its competitors, Altran is able to go further than simply consulting on a project, but can offer complete design and development services. Architects of this network are chairman Alexis Kniazeff and co-chairman Hubert Martigny, the company’s founders, and CEO Michel Friedlander. Altran’s shares are traded on the Euronext Paris Stock Exchange, as part of its prestigious CAC 40.

Management Innovators in the 1980s

Alexis Kniazeff and Hubert Martigny met while working as consultants at Peat Marwick, later known as KMPG. At Peat Marwick, Kniazeff, a civil engineer with a master’s degree in business, and Martigny developed their own vision of how a company should be organized—notably by adopting a highly decentralized management, which in turn would enable the creation of independent profit centers. The future partners became knowledgeable in the rapidly expanding technology sector, and in 1970 launched their own consulting agency. However, since few of their clients were willing to convert to their decentralized ideal, Kniazeff and Martigny decided to launch their own company, Altran, in 1982.

From the start, Altran targeted the high-technology segment of the aerospace industry, providing engineering consulting on various space program and military hardware projects. The company’s strong engineering background enabled it to position itself as a full-service consultancy—Altran’s engineers did not merely provide consulting services but also participated in actual design and development as well. Altran grew rapidly through the first half of the decade and by 1985 counted a staff of 50 engineers, including future CEO Michel Friedlander, who joined the company that year.

Altran had already put into place the management theories touted by Kniazeff and Martigny, organizing its operations into a number of small business units that would later generally range from 10 to 200 employees. Each business unit was then operated more or less as an independent company that identified its own growth strategy and controlled its own investment program while at the same time receiving support from central management. Business units supported each other mutually, creating what the company referred to as a “cross-fertilization” of expertise. Managers’ salaries were based on their business units’ performance, further stimulating the entrepreneurial nature of Altran’s operations.

Altran went public in 1987, listing on the Secondary Market of the Paris Stock Exchange. By 1989, Altran’s sales had neared the equivalent of EUR 48 million. The number of the company’s employees grew as well, nearing 1,000 by 1990. Along the way, Altran continued to expand its range of expertise, moving into the transportation, telecommunications, and energy sectors, as well as developing a strong information technology component. This multi-disciplinary approach had a number of benefits, helping to protect the company during cyclical downturns, but, more importantly, by allowing it to share expertise across a variety of fields. In this way, Altran was able to take on highly complex projects for its major clients.

The early 1990s marked a turning point for Altran as the company adopted a new business model. While much of the company’s work during the 1980s had been performed in-house, at the beginning of the 1990s the company developed a new operational concept, that of a temp agency for the high-technology sector. Altran began placing its staff of highly-skilled engineers with its clients, where the Altran employees worked alongside the client’s staff, adding their specialized expertise to a project.

Altran’s growth picked up in the early 1990s, and the company quickly established a network of subsidiaries and offices throughout France, in part through a series of acquisitions. By the end of the decade, the company had more than 50 subsidiaries in France, and had taken the lead of that market’s technology consulting sector. The company was helped by the long-lasting recession affecting France and much of Europe at the beginning of the decade, as companies began outsourcing parts of their research and development operations. Altran was also expanding by acquisition, buying up a number of similarly operating consultancies in France, such as the 1992 acquisition of GERPI, based in Rennes. By the end of that year, Altran’s revenues had swelled to the equivalent of EUR 76.5 million.

International Expansion in the 1990s

The elimination of border controls within the European Community in 1992 inaugurated a new era of transnational activity as European companies began expanding into the newly opened markets. As more of its clients began operations in other European countries, Altran found itself confronted with the need to follow them. At first Altran turned to foreign partnerships in order to accommodate its clients. Yet this approach quickly proved unsatisfactory, and Altran put into place an aggressive acquisition plan in order to establish its own foreign operations.

Altran targeted the Benelux countries—the first to lower their trade barriers—acquiring a Belgian company in 1992. Those markets remained a company target over the next several years as Altran built up a network of some 12 companies and 1,000 consultants by the end of the decade. Altran’s takeovers were always friendly—part of the company’s acquisition criteria was that existing management remain in place—and in general the acquired firms retained their names. At the same time, Altran shrewdly protected itself from taking on a heavy debt load in order to fund its acquisition moves, establishing a policy of paying a set initial fee for an acquisition, then basing subsequent annual payments on the acquired unit’s performance.

Spain became the company’s next target in 1993. Starting with the acquisition of SDB Espan, a leading telecommunications consultant in that country, Altran’s Spanish operations later grew into a group of nine companies with more than 2,000 consultants. Spain was to remain one of the company’s top three markets into the new century, with a total of six companies, including new acquisitions Norma, STE, and Inser, and then Strategy Consultors, based in Barcelona, in 2000.

By 1995, Altran’s sales had topped EUR 155 million, and its total number of employees had grown to nearly 2,400. At this point, Altran was already becoming known for its highly active recruiting program, since its business depended on attracting large numbers of high-caliber engineers. However, Altran also recognized that the majority of engineers lacked a background in management. Thus, the company launched its own accelerated management training program, which was capable of training 200 candidates per year.

Company Perspectives:

ALTRAN, founded in 1982, represents a unique endeavour. Today, we are Europe’s leading technology consultancy, with 15,000 engineers in 14 countries worldwide providing high value-added support for innovation. Our commitment is to help clients in industry and services gain a new competitive edge and enhance their performance with innovative products and processes. This support spans every stage from preliminary studies, strategic planning, and technology watch to design, implementation, and inspection. ALTRAN stands out from other consultancies in that we are active in sectors from aerospace and telecoms to banking, with expertise covering all areas of engineering. This unique know-how enables us to make a key contribution to innovations shaping our daily lives, now and in the years ahead.

The United Kingdom became Altran’s next international growth market in 1995. In that year, the company acquired High Integrity Systems, a consulting firm that specialized in the information technology (IT) market, with a focus on assisting companies that were transitioning into new-generation computer and network systems. Other acquisitions in the United Kingdom included IT consulting specialist DCE Consultants, which operated from offices in Oxford and Manchester, and, in 1997, Praxis Critical Systems, founded in Bath in 1983 to provide software and safety-engineering services. Not all of Altran’s expansion moves came through acquisitions. In order to supplement the activities of its acquisitions, the company also opened new subsidiary offices, such as Altran Technologies UK, founded in 1997 as a multi-disciplinary and cross-industry engineering consultancy.

Altran stepped up its expansion in the second half of the 1990s. Acquisitions continued to provide the bulk of its international growth as the company began acquiring an average of 15 companies per year. Italy became a target for growth in 1996, when Altran established subsidiary Altran Italy, as well as CE Consulting, before making its first acquisition in that country in 1997. In 1998, Altran added four new Italian acquisitions, EKAR, RSI Sistemi, CCS and Pool. In 1999, the company added an office in Turin as well as two new companies, ASP and O&I. Then, in 2000, the company’s Italian branch expanded to 10 subsidiaries with the opening of offices in Lombardy and Lazio and the acquisition of CEDATI.

Germany was also a primary target for Altran during this period, starting with the 1997 establishment of Altran Technologies GmbH and the acquisition of Europspace Technische Entwicklungen, a company that had been formed in 1993 and specialized in aeronautics. In 1998, the company added consulting group Berata; the following year, Askon Consulting joined the group, which then expanded with a second component, Askon Beratung. In 2000, Altran acquired I&K Beratung. In 2002, Askon Beratung was spun off from Askon consulting as a separate, independently operating company within Altran.

Similar progress was made in Switzerland, a market Altran entered in 1997 with the purchase of D1B2. The Berate Germany purchase brought Altran that company’s Swiss office as well in 1998; that same year, Altran launched its own Swiss startup, Altran Technologies Switzerland. In 1999, the company added three new Swiss companies, Net@rchitects, Innovatica, and Cerri. Then, in 2000, Altran’s presence in Switzerland grew with two new subsidiaries, Infolearn and De Simone & Osswald. By 2002, the company’s Swiss network had added a new component with the purchase of Sigma.

Other European countries joined the Altran network in the late 1990s as well, including Portugal and Luxembourg in 1998 and Austria in 1999. By the end of 1999, the company’s sales had climbed to EUR 614 million; significantly, international sales already accounted for more than one-third of the company’s total revenues.

In 1998, Altran moved up to the Paris main board’s monthly settlement market. Altran nonetheless remained largely unknown outside its industry; in the late 1990s, however, the company began to take a number of public relations initiatives. One of the most successful of these was the establishment of the Altran Foundation, which began offering an annual Innovation Award for projects based on a set theme—the development of desalination systems, for example. In another public relations move, in 1999 the company joined the Proust racing team as sponsor and technology contributor.

With its European network largely in place at the turn of the century, Altran turned its sights on building up its global network. The United States became a primary target for the company’s expansion with the acquisition in 2000 of a company that was renamed Altran Corporation. Altran began building its operations in South America as well, especially in Brazil. By the end of 2001, Altran’s revenues had jumped to more than EUR 1.2 billion, while its ranks of consultants now topped 15,000.

In 2002, Altran appeared to be preparing for a full-scale entry into the United States. After providing $56 million to back a management buyout of the European, Asian, and Latin American operations of bankrupt Arthur D. Little—the technology consultants spun off from the Massachusetts Institute of Technology in 1982—Altran itself acquired the Arthur D. Little brand and trademark. This acquisition was seen as an important step in achieving the company’s next growth target, becoming the world’s leading high-technology consultancy firm with sales of EUR 2 billion by 2003 and more than 40,000 engineers by 2005.

Principal Subsidiaries

Alplog; Altior; Altran Esp; Altran Europe; Altran Gmbh; Altran Italia; Altran Scandinavia; Altran Switzerland; Altran Systèmes D’information; Altran Uk; Axiem; Ciriel; Dp Consulting; Atlantide Gerpi Ouest; Orthodrome; Altran Netherlands; Netarchitects Communication; Adena; Altaïr Technologies; Altran Technologies Gmbh; Altran Informatique Technologies; Altran Technologies UK; Altran Critical Systems; Dp Consulting UK; Altran Luxembourg; Altran Technologies Luxembourg: Berata Gmbh; Altran Technologies Netherlands; Altran Technologies Switzerland; Altran Belgium; Altran Usa Inc; Ag Technology.

Key Dates:

1982:: Altran Technologies is founded by Alexis Kniazeff and Hubert Martigny.
1987:: Altran Technologies goes public.
1990:: Altran shifts its business model, becoming a high-technology temporary agency.
1992:: Altran acquires a Belgian company, initiating its international expansion throughout Europe and eventually to the United States.
1993:: The company acquires SDB Espan.
2002:: Altran acquires the international brand and trademark of Arthur D. Little, Inc.