LECTRA First nine months of 2020: revenues and earnings impacted by the COVID-19 crisis
§ Revenues:
§ Income from operations:
§ Net income:
§ Free cash flow:
§ Net cash:
* Like-for-like
| In millions of euros | ||||
| 2020 | 2019 | 2020 | 2019 | |
| Revenues | 56.5 | 68.6 | 170.6 | 205.8 |
| Change like-for-like (%)(1) | -15% | -16% | ||
| Income from operations | 8.5 | 12.3 | 15.6 | 29.7 |
| Change like-for-like (%)(1) | -24% | -45% | ||
| Operating margin (in % of revenues) | 15% | 17.9% | 9.1% | 14.4% |
| Net income | 6.6 | 8.7 | 11 | 21.3 |
| Change at actual exchange rates (%) | -24% | -48% | ||
| Free cash flow | 8.5 | 5.6 | 10 | 18.1 |
| Shareholders’ equity(2) | 183.5 | 183 | ||
| Net cash(2) | 117.9 | 120.6 | ||
- Like-for-like: 2020 figures restated at 2019 exchange rates
- At
September 30, 2020 andDecember 31, 2019
(Comparisons between 2020 and 2019 are like-for-like, unless stated otherwise. As the impact of the acquisition of Retviews on the financial statements for the first nine months of 2020 is not material, like-for-like changes exclude only the variations in exchange rates.).
Q3 2020: signs of improvement
In its Q1 and Q2 financial reports, published
While the repercussions of the pandemic continued to mark Q3, several signs of improvement were observed.
Indeed, after a decline of 42% in Q2, orders for perpetual software licenses, equipment and accompanying software, and non-recurring services (
The annual value of new software subscription orders (0.8 million euros) was up 75%, thus confirming the adoption of
At the same time, revenues from consumables and parts, a leading indicator of the Group's customers’ activity, declined by 9%, following a 46% drop in Q2.
Total revenues (
Income from operations (
Net income (
Free cash flow was positive by
First nine months of 2020
The COVID-19 epidemic and its consequences really marked the first nine months of 2020.
From the start of the crisis, the Group took the necessary hygiene and physical distancing measures to safeguard the health of employees, customers, suppliers and other stakeholders. These measures are still in effect.
Lockdown measures implemented by most countries, especially during the first half of the year, have led to a significant reduction in activity by the Group's customers, and to the suspension of some commercial discussions with
While a gradual increase in activity occurred in Q3, many customers have not reached the level of activity they had before the crisis and have been led to temporarily reduce their capital expenditures or operating expenses. All three strategic market sectors—fashion, automotive and furniture—have been strongly impacted.
Orders
Orders for perpetual software licenses, equipment and accompanying software, and non-recurring services (
In addition, the annual value of new software subscription orders amounted to
Revenues
In this unique and unprecedented environment, total revenues (
Revenues from perpetual software licenses, equipment and accompanying software, and non-recurring services (
Revenues from recurring contracts (
Revenues from consumables and parts (
Income from operations and net income
Income from operations (
The operating margin (9.1%) was down 5 percentage points (down 5.3 percentage points at actual exchange rates).
Net income (
Positive free cash flow – a particularly robust balance sheet
Free cash flow was
At
Business trends and 2020 outlook
In its 2019 Financial Report, published
The Group already noted the uncertainties linked to the COVID-19 epidemic, whose impact was observed only in
While most of the objectives of the 2020-2022 strategic roadmap remain valid, and particularly the acceleration towards Industry 4.0, the growth objectives for the end of the period will have to take into account the consequences of the economic crisis caused by the COVID-19. As a result, the Group will update its objectives when it considers that visibility has returned to a sufficient level.
2020 outlook
The year 2020 will be marked by the global health crisis and its consequences.
In light of its sound financial position, capacity for resilience, and medium-term outlook, the Group has decided not to put in place short-time working arrangements (under the partial activity scheme), and not to benefit from any financial support from the French government.
Furthermore, the Group has implemented measures to reduce its overhead costs, which were initially budgeted to increase by 8% in 2020, by cancelling or postponing all non-essential expenses.
The Group's three strategic market sectors, fashion, automotive and furniture, will probably undergo a consolidation and restructuring phase and companies operating in these markets could continue to reduce their capital expenditures and operating expenses, depending on the evolution of the macroeconomic environment, as well as the health aspect of the crisis.
Nevertheless, a significant improvement in the volume of orders, revenues and income from operations was recorded in Q3 and this trend could potentially be confirmed in Q4; however, such developments are subject to continuing uncertainties surrounding the evolution of the pandemic.
In this particularly uncertain environment, the Group demonstrates on a daily basis, through the decisions that it has taken, its commitment to its social, environmental and societal responsibilities, and to the fundamental values that underlie these responsibilities.
The Group’s markets provide goods for which consumer demand will persist worldwide.
The Management Discussion and Analysis of Financial Conditions and Results of Operations and the financial statements for the first nine months of 2020 are available on lectra.com. Q4 and FY 2020 earnings will be published on
For companies that breathe life into our wardrobes, car interiors, furniture and more,
lectra.com
Tel. +33 (0)1 53 64 42 00 – Fax +33 (0)1 53 64 43 00 – lectra.com
A French Société Anonyme with capital of €32,099,100 • RCS Paris B 300 702 305
Attachment
- Lectra_PressRelease_Q32020
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