Record revenues and income from operations in 2018
* Revenues: €282.6 million (+4%)(*)
* Income from operations: €40.2 million (+11%)(*)
* Net income: €28.7 million (-2%)
* Free cash flow: €21.6 million
* Net cash: €102.2 million
* Dividend(**): €0.40 per share (+5.3%)
** Proposed to the Annual Shareholders' Meeting on April 30, 2019
In millions of euros October 1 - December January 1 - December
2018 2017 2018 2017
Revenues 75 71.5 282.6 277.2
Change like-for-like (%)((1)) +4% +4%
Income from operations 12 10.2 40.2 39.3
Change like-for-like (%)((1)) +11% +11%
Operating margin (in % of
revenues) 16% 14.3% 14.2% 14.2%
Net income 8.6 9.2 28.7 29.3
Change at actual exchange rates -6% -2%
Free cash flow 12.8 14 21.6 33.2
Shareholders' equity((2)) 170.4 151.2
Net cash((2)) 102.2 98.1
1. Like-for-like: 2018 figures restated at 2017 exchange rates
2. At December 31
Paris, February 12, 2019. Today, Lectra's Board of Directors, chaired by Daniel
Harari, reviewed the consolidated financial statements for the fiscal year
2018. Audit procedures have been performed by the Statutory Auditors. The
certification report will be issued at the end of the Board of Director's
meeting of February 26, 2019.
(Comparisons between 2018 and 2017 are like-for-like, unless stated otherwise).
Q4 2018: Strong growth in income from operations
Q4 was again affected by the consequences of the trade war between the United
States and certain countries and regions of the world, which weighed on the
investment decisions of many customers in all Lectra market sectors.
Q4 orders for new systems (€32.5 million) decreased by 3% (-€1.1 million)
compared to Q4 2017.
Revenues (€75 million) increased by 4% (+5% at actual exchange rates).
Income from operations (€12 million) was up 11% (+17% at actual exchange rates).
The operating margin (16%) increased by 1 percentage point like-for-like and
1.7 percentage points at actual exchange rates.
Net income (€8.6 million) was down €0.5 million (-6%) at actual exchange rates.
The net income for 2017 included a net tax profit of €0.6 million in respect of
Free cash flow totaled €12.8 million (€14 million in Q4 2017).
Acquisition of the company Kubix Lab
On January 25 2018, the Company announced the acquisition of the Italian company
Founded at the end of 2015, Kubix Lab developed a cutting-edge technological
offer called Kubix Link, which enables fashion brands to manage from end to end,
within a single application, all product information deriving mainly from
multiple IT systems (ERP, PDM, PLM, etc.).
Negative impact of euro appreciation
The appreciation of the euro against most currencies had a major negative
mechanical impact on the full-year results, reducing revenues by €6.7 million (-
2%) and income from operations by €3.3 million (-8%) at actual exchange rates,
compared to like-for-like figures.
Challenging macroeconomic and geopolitical environment
The entire year was marked by a "wait-and-see" attitude by companies in all
Lectra market sectors, particularly in automotive, following the protectionist
measures announced and put in place first by the United States, and subsequently
by Europe and China. In addition, the economy of those emerging countries whose
currency had experienced a sharp decline was negatively affected, leading some
customers to put their investment decisions on hold.
Income from operations in line with the Company's objectives
Orders for new systems (€121.7 million) were stable relative to 2017.
Revenues amounted to €282.6 million, up 4% (+2% at actual exchange rates).
Revenues from new systems sales (€122.7 million) increased by 2% and recurring
revenues (€159.8 million) by 6%.
Income from operations (€40.2 million) increased by 11% (+2% at actual exchange
rates) and the operating margin by 14.2%, up 0.8 percentage points (stable at
actual exchange rates).
These results are in line with the Company's expectations as set out on July 25
and then October 30, 2018. These results are a new historic record.
Net income (€28.7 million) was down 2% at actual exchange rates.
Free cash flow totaled €21.6 million (€33.2 million in 2017).
Impact of the sale of certain software in SaaS mode
In early 2018, the Company began selling some of its software on a subscription
basis, using the Software-as-a-Service model.
The change to the SaaS model, which is at the heart of the Company's strategic
roadmap, will contribute to the long-term development of the Company's
activities and strengthen its recurring revenue, while meeting customers'
expectations. In the short-term, however, it has a negative impact as revenues
from software subscriptions are recorded progressively over several years.
Without this negative impact of €1.2 million on both revenues and income from
operations in 2018, the income from operations would have increased by 14%
instead of 11%.
A zero-debt Company, a particularly robust balance sheet
Consolidated shareholders' equity amounted to €170.4 million.
Cash and cash equivalents, as well as net cash position, totaled €102.2 million,
after the disbursement of €7.1 million for the acquisition of the company Kubix
Lab and the dividend payment of €12 million declared in respect of fiscal year
2017-2019 strategic roadmap: second progress report
The successful completion of the previous two roadmaps (2010-2012 and
2013-2016), combined with the success of the €50 million Investments for the
Future program over the 2012-2015 period, have enabled the Company to build its
new strategic roadmap for 2017-2019 on particularly robust foundations.
This strategic roadmap-first published in the Financial Report dated February
9, 2017-constitutes the decisive initial stage in the evolution of Lectra over
the next ten years. It sets out the fundamentals that will enable the Company to
leverage the full potential of its new offers for Industry 4.0 from 2020
onwards. Its objectives are to reinforce Lectra's global leadership and ensure
sustainable growth, while preserving its short-term profitability.
Overall, the second year of the roadmap was successfully completed according to
plan. The progress reports corresponding to the different sections are
Four major trends will shape Lectra's market sectors and geographic markets
These four main trends (Millennials, digitalization of business, emergence of
Industry 4.0, and China's evolving economy) and their impact continue to
constitute the main evolutions for the environment of Lectra customers. A
growing number of companies are incorporating a digital component in their
The trade war between the United States and China does not call into question
the fundamental change in the Chinese economy; the country's industrialists are
advancing their digitalization transformation and incorporating the principles
and technologies of Industry 4.0 in their processes, as the Chinese market
confirms its potential for brands from across the globe.
Lectra, an indispensable player in Industry 4.0
Industry 4.0 has transformed how all businesses operate and create value. Lectra
has everything required to achieve its ambition to be an indispensable player in
The year 2018 was highlighted by the launch in selected pilot countries of
numerous innovative offers enabling Lectra's customers to implement the
principles of Industry 4.0. These solutions constitute new product lines that
meet customers' new requirements or that supplement existing software.
Lectra launched its first Cutting Room 4.0 for Made-To-Order upholstered
furniture. The Company also announced the rollout, starting in early 2019, of
Fashion On Demand by Lectra, a disruptive new offer that enables production of
personalized garments at ready-to-wear production speed.
At the same time, Lectra launched Virga, its brand-new single-ply fabric cutting
solution that analyzes the material, automatically adjusts the cutting layout
and optimizes cycle times for plain and patterned fabrics, allowing simultaneous
loading, scanning, cutting and offloading.
In addition, the first of a series of cloud-based applications conceptualized
for product development and production teams are available: Quick Estimate and
These offers will become available progressively worldwide in 2019.
Developing the business model for profitable, long-term growth
Lectra has made progress in all of its strategic objectives, which will continue
to guide the Company's actions in 2019.
Unlike the previous year, the degraded macroeconomic and geopolitical
environment in 2018 meant that not all the growth accelerators-China, leather,
airbags, product personalization and digitalization of fashion and apparel
businesses-contributed to the Group's dynamic activity; but they are expected to
drive revenue growth in 2019.
Increased investment in the design and development of Lectra's offers
R&D investments came to €30.8 million in 2018. They increased by 11% and came to
10.9% of revenues. 346 people (20% of the Group's workforce) are involved in the
design and development of the offer, 20 more than on December 31, 2017.
Use of available cash
In January 2018, the Company acquired Kubix Lab for €7.1 million. By combining
its offerings with those of Kubix Lab, Lectra will provide its fashion customers
with a revolutionary product information management platform.
The Company's cash position is sufficient to finance future targeted
Dividend raised to €0.40 per share
The Board of Directors will propose to the Annual Shareholders' Meeting of April
30, 2019 to increase the dividend to €0.40 per share (+5.3%) in respect of FY
2018. This dividend would represent a payout ratio of 44% of consolidated net
income and a yield of 2.2% based on the December 31, 2018 closing share price.
The Company entered 2019 with a particularly robust balance sheet and operating
fundamentals, a new organization of its subsidiaries, and a strengthened
An uncertain geopolitical environment
Still, the year ahead is fraught with unpredictability in light of persisting
uncertainty regarding geopolitical factors and the threat of protectionism, amid
growing fears of an economic slowdown. These considerations could continue to
weigh on businesses' investment decisions.
Impact of exchange rates
The Company has based its 2019 objectives on the exchange rates in effect at
year-end 2018, notably $1.15/€1.
When converting 2018 results using the exchange rates retained for 2019,
revenues are mechanically increased by €1.6 million and income from operations
by €1.2 million, relative to the published results.
Growing impact of sales of certain software in SaaS mode
The Company has decided to sell its new software exclusively in SaaS mode. If
the positive response to the new offer is confirmed, the volume of software sold
in SaaS mode should show strong growth in 2019.
This change in sales model will have a positive impact on the Company's revenues
and income from operations in the medium term. However, it has a negative impact
on the Company's stated objectives for 2019, which are 1 to 2 percentage points
lower for revenue growth, and 9 to 12 percentage points lower for income from
operations, than the comparable figures if all software were sold as perpetual
licenses along with their associated maintenance contracts.
In light of the above, the Company has set the objective of achieving revenue
growth of 3% to 7% in 2019, like-for-like. Growth in income from operations
before non-recurring items would then be down 4% in the low assumption for
revenue growth, flat in the median assumption, and up 4% in the high assumption.
Without the impact of growing sales of software on a subscription basis, the
objective for revenue growth would have been stated as 4% to 8% and the
objective for growth in income from operations before non-recurring items would
have been 5% to 16%.
With the exchange rates retained for 2019, the growth in revenues and in income
from operations before non-recurring items, at actual exchange rates, would be
0.6 and 3 points higher, respectively, than the like-for-like figures.
The Company remains confident in its medium-term growth prospects
More than ever, the entire Company is focused on growing its sales activity. The
new products launched in 2018 and those that will be released in subsequent
years should make an ever-increasing contribution to this growth.
The Management Discussion and Analysis of Financial Conditions and Results of
Operations and the financial statements for Q4 and the fiscal year 2018 are
available on lectra.com.
First quarter earnings for 2019 will be published on April 29, 2019. The Annual
Shareholders' Meeting will take place on April 30.
For companies that breathe life into our wardrobes, car interiors, furniture and
more, Lectra is crafting the premium technologies that facilitate the digital
transformation of their industry. Lectra's offer empowers brands and
manufacturers from design to production, providing them with the market respect
and peace of mind they deserve. Founded in 1973, today Lectra has 32
subsidiaries across the globe, serving customers in over 100 countries. With
more than 1,700 employees, Lectra reported revenues of $333 million in 2018.
Lectra is listed on Euronext (LSS).
Lectra - World Headquarters: 16-18, rue Chalgrin · 75016 Paris · France
Tel. +33 (0)1 53 64 42 00 - Fax +33 (0)1 53 64 43 00 - www.lectra.com
A French Société Anonyme with capital of €31,577,881 · RCS Paris B 300 702 305
Lectra: Record revenues and income from operations for 2018:
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Source: LECTRA via GlobeNewswire
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