LECTRA: Q1 2020: revenues and earnings impacted by the COVID-19
virus
§ Revenues: 63.5 million euros (-6%)*
§ Income from operations: 5.1 million euros (-39%)*
§ Net income: 3.4 million euros (-41%)
§ Free cash flow: 3.7 million euros
§ Net cash: 124 million euros
* Like-for-like
in millions of euros |
January 1 – March 31 |
|
2020 |
2019 |
Revenues |
63.5 |
67 |
Change like-for-like (%)(1) |
-6% |
|
Income from operations |
5.1 |
7.9 |
Change like-for-like (%)(1) |
-41% |
|
Operating margin (in % of revenues) |
8% |
11.8% |
Net income |
3.4 |
5.7 |
Change at actual exchange rates (%) |
-41% |
|
Free cash flow |
3.7 |
9.8 |
Shareholders’ equity(2) |
186.9 |
177.6 |
Net cash(2) |
124 |
113.5 |
|
|
|
|
|
- Like-for-like: 2020 figures restated at 2019 exchange
rates
- At March 31, 2020 and December 31, 2019
Paris, April 29, 2020. Today, Lectra’s Board of
Directors, chaired by Daniel Harari, reviewed the unaudited
consolidated financial statements for the first quarter of
2020.
(Detailed comparisons between 2020 and 2019 are
like-for-like, unless otherwise stated. As the impact of the
acquisition of Retviews on the financial statements for the first
quarter is not material, like-for-like changes exclude only the
variations in exchange rates).
The COVID-19 epidemic and its consequences
marked the first quarter of 2020. After emerging in China in
December 2019, the health crisis quickly spread across the world in
March, causing a global economic crisis of unprecedented
proportions.
From the start of the crisis, the Group took the
necessary hygiene and distancing measures to safeguard the health
of employees, customers, suppliers and other stakeholders. A remote
working system was immediately put in place for all employees whose
physical presence on site is not required; this was done in France
and other countries where such measures were ordered or recommended
by the government.
In parallel, the Group has maintained the
continuity of all business operations. In particular, it has
continued to manufacture equipment, consumables and spare parts,
and to deliver them worldwide. After-sales support for the Group's
solutions has been provided to customers that continue to
operate.
Decline in revenues and income from
operations
In this unique and unprecedented environment,
the Group’s revenues (63.5 million euros) decreased by 6% compared
to Q1 2019. At actual exchange rates, they declined by 5%.
Orders and revenues from software licenses, equipment and
accompanying software, and non-recurring services
Orders for perpetual software licenses,
equipment and accompanying software, and non-recurring services
(19.3 million euros) were down 28%. The slowdown in orders was
particularly acute in March. Orders for perpetual software licenses
(2.7 million euros), equipment and accompanying software
(13.5 million euros), and training and consulting (2.6 million
euros) decreased by 26%, 30% and 21%, respectively.
Revenues from perpetual software licenses,
equipment and accompanying software, and non-recurring services (22
million euros) were down by 15% (-14% at actual exchange
rates).
Orders from software subscriptions - revenues from recurring
contracts, consumables and parts
The annual value of new software subscription
orders amounted to 0.6 million euros, up by 52% compared to Q1
2019.
Revenues from recurring contracts (25 million
euros), a key pillar of the Group's business model, which
constitute a protective factor and will help mitigate the impact of
the COVID-19 crisis on revenues and results, increased by 5%.
Revenues from consumables and parts (16.5
million euros), which were affected by the reduction in business
activity of the Group's customers due to the COVID-19 crisis,
decreased by 7%.
Income from operations and net income
Income from operations (5.1 million euros)
decreased by 39% (-35% at actual exchange rates).
The operating margin (8%) was down 4.2
percentage points like-for-like (-3.8 percentage points at actual
exchange rates).
Net income (3.4 million euros) decreased by 41%
at actual exchange rates.
Positive free cash flow – a particularly robust
balance sheet
Free cash flow came to 3.7 million euros (9.8
million euros in Q1 2019).
Consolidated shareholders’ equity amounted to
186.9 million euros.
Cash and cash equivalents, as well as net cash
position, totaled 124 million euros.
Business trends and outlook
In its 2019 Financial Report, published February
11, 2020, Lectra had reported its long-term vision and its new
strategic roadmap for the 2020-2022 period.
The Group already noted the uncertainties linked
to the COVID-19 epidemic, whose impact was observed only in China
at the time and decided that it would not formulate estimates for
2020 until such time as visibility improves.
Since then, the health crisis has become a
pandemic, leading to a major and rapid slowdown of the global
economic activity.
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 the consequences of the COVID-19 crisis
into account.
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 COVID-19
crisis and its consequences.
Lectra can face the impacts of the epidemic with
a particularly robust balance sheet, a positive net cash position
of 124 million euros at March 31, 2020, and a proven business model
with, among other strengths, a very high percentage of recurring
revenues. The Group therefore considers that it is financially
equipped to deal with a temporary or more sustained reduction in
its business activity.
While the Group has implemented measures to
control its fixed overhead costs, it 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, in light of its sound financial position,
capacity for resilience, and medium-term outlook. It thus intends
to maintain its entire R&D effort, which currently drives 377
men and women, and so be ready post-crisis with well-prepared,
motivated teams. Lectra also supports the nation’s collective
effort to fight against this crisis by voluntarily cutting masks
and medical personal protective equipment.
At this stage, while the consequences of the
crisis are already apparent in the business operations and
financial statements for the first quarter, it is difficult to
predict the impact over the rest of the year. The greatest impact,
however, could be expected in Q2, which could see a sharp decline
in revenues and in income from operations.
The Group's business activity should rebound
after this crisis; however, the date and extent of the rebound are
difficult to estimate, due to the uncertainties regarding how the
pandemic will evolve. The Group's three strategic market sectors –
fashion, automotive and furniture – will probably undergo a
consolidation and restructuring phase. Depending on the evolution
of the macroeconomic environment among other things, companies
operating in these markets could be led to temporarily reduce their
capital expenditures and operating expenses.
In this particularly uncertain environment, the
Group demonstrates on a daily basis its commitment to its social,
environmental and societal responsibilities through the decisions
that it has taken.
Lectra’s markets provide goods for which
consumer demand will persist worldwide. The Group, which preserves
its competitive advantage and benefits from a very solid financial
position, therefore remains confident in its growth prospects for
the medium-term.
The 2019 Annual Financial Report, as well as the
Management Discussion and Analysis of Financial Conditions and
Results of Operations and the financial statements for Q1 2020 are
available on lectra.comThe Combined Annual Shareholders' Meeting
will be held on April 30, 2020, without the physical presence of
shareholders.Q2 and H1 2020 earnings will be published on July 27,
2020, after the close of trading on Euronext Paris.
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,
manufacturers and retailers, from design to production, providing
them with the market respect and peace of mind they deserve.
Founded in 1973, today Lectra has 34 subsidiaries across the globe,
serving customers in over 100 countries. With more than 1,800
employees, Lectra reported revenues of 280 million euros in 2019.
Lectra is listed on Euronext Paris (LSS).
lectra.com
Lectra – World Headquarters: 16–18, rue Chalgrin • 75016 Paris •
FranceTel. +33 (0)1 53 64 42 00 – Fax +33 (0)1 53 64 43 00 –
www.lectra.comA French Société Anonyme with capital of €32,099,100
• RCS Paris B 300 702 305
- Lectra_PressRelease_Q12020
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