Lectra SA · EURONEXT:LSS

Lectra SA — FY2017 Earnings Presentation

45 slides from Lectra SA's earnings presentation, Feb 13, 2018

  1. Slide 1: Financial Results Q4 & FY 2017

    FINANCIAL RESULTS Q4 & FY 2017 Daniel Harari, Chairman & CEO Jérôme Viala, Executive Vice President Paris – February 13, 2018

  2. Slide 2: Financial Results Q4 & FY 2017 agenda

    Financial Results Q4 & FY 2017 Vision and Main Highlights Q4 2017 Results FY 2017 Results Strategic Roadmap for 2017–2019: First Progress Report 2018 Outlook 2 Lectra - Financial Results Q4 & FY 2017

  3. Slide 3: Lectra's Ambition: to Become an Indispensable Player in Industry 4.0

    Vision and Main Highlights Lectra’s Ambition: to Become an Indispensable Player in Industry 4.0 First year of Revenues A zero-debt the roadmap and earnings company, a for 2017-2019 in line with particularly successfully 2017 robust executed objectives balance sheet 3 Lectra - Financial Results Q4 &

  4. Slide 4: Uncertain Macroeconomic, Geopolitical and Currency Conditions

    Vision and Main Highlights Uncertain Macroeconomic, Geopolitical and Currency Conditions This context prompted many companies to postpone their investments Consequences of the US Strong appreciation of the Terrorist attacks or the risk elections on trade relations euro against the US dollar of attac

  5. Slide 5: Q4 2017 Results

    Financial Results Q4 & FY 2017 Vision and Main Highlights Q4 2017 Results FY 2017 Results Strategic Roadmap for 2017–2019: First Progress Report 2018 Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2017 figures restated at 2016 exchange rates) 5 Lectra - Financial Results Q4 & FY 2

  6. Slide 6: Slight Decline in Orders for New Systems

    Q4 2017 Results Slight Decline in Orders for New Systems ORDERS FOR NEW SYSTEMS, in millions of euros ORDERS BY PRODUCT LINE, Q4 2017 vs. Q4 2016 -3% 35.2 22% 32.9 8 -3% -65% 2.8 30.1 21% 27.3 -21% +16% New CAD/CAM and PLM software licenses CAD/CAM equipment and accompanying software CAD/CAM equipme

  7. Slide 7: Strong Growth in Income from Operations, Like-for-Like

    Q4 2017 Results Strong Growth in Income from Operations, Like-for-Like In millions of euros REVENUES INCOME FROM OPERATIONS At actual exchange rates Like-for-like At actual exchange rates Like-for-like +3% +7% -4% +13%  Free cash flow includes receipt of €6.3 million relating to the balance of 71.5

  8. Slide 8: FY 2017 Results

    Financial Results Q4 & FY 2017 Vision and Main Highlights Q4 2017 Results FY 2017 Results Strategic Roadmap for 2017–2019: First Progress Report 2018 Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2017 figures restated at 2016 exchange rates) 8 Lectra - Financial Results Q4 & FY 2

  9. Slide 9: Strong Growth in Orders for CAD/CAM Equipment and Software

    FY 2017 Results Strong Growth in Orders for CAD/CAM Equipment and Software The company considers it has strengthened its competitive position in most of its market sectors and geographic markets ORDERS FOR NEW SYSTEMS, in millions of euros 2016 2017 Change Change At actual Like-for-like 35.2 exchang

  10. Slide 10: Contrasted Geographical Activity

    FY 2017 Results Contrasted Geographical Activity AMERICAS EUROPE ASIA-PACIFIC +11% +2%  In 2017 orders in China amounted to €18.1 million. 47.4 Excluding sales to Korean 42.9 43.7 43.6 automotive suppliers, they +14% increased by 36%  Orders from Korean 22.8 20.4 automotive suppliers in Asia-Pacif

  11. Slide 11: Growth in Orders Concentrated in Fashion and Apparel, and Furniture

    FY 2017 Results Growth in Orders Concentrated in Fashion and Apparel, and Furniture ORDERS FOR NEW SYSTEMS, in millions of euros 123.7 115.6 +1% 5% 5% 11% Change +19% 10%  Europe +7% 36%  Americas +48% -1% 40%  Asia-Pacific -22%  Europe +3% +15% 48%  Americas +24% 45%  Asia-Pacific +25% 2016 2

  12. Slide 12: Revenues and Earnings Up Sharply, in Line with the Company's Objectives

    FY 2017 Results Revenues and Earnings Up Sharply, in Line with the Company’s Objectives In millions of euros REVENUES INCOME FROM OPERATIONS At actual exchange rates Like-for-like At actual exchange rates Like-for-like +7% +8% OBJECTIVE +5% +10% OBJECTIVE 11.5 Growth in revenues Growth in income fro

  13. Slide 13: Revenues Progress Across all Product Lines

    FY 2017 Results Revenues Progress Across all Product Lines In millions of euros REVENUES FROM NEW SYSTEMS SALES RECURRING REVENUES At actual exchange rates Like-for-like At actual exchange rates Like-for-like +9% +10% +5% +6% 154.1 155.5 147.1 147.1 123.1 124.7 113.1 113.1 2016 2017 2016 2017 2016 2

  14. Slide 14: Increase in Recurring Revenues Finances Increase in Fixed Overhead Costs

    FY 2017 Results Increase in Recurring Revenues Finances Increase in Fixed Overhead Costs EVOLUTION OF INCOME FROM OPERATIONS (1.7) (2.6) In millions of euros +6.2 (7.1) +7.2 39.3 37.3 2016 Growth in Growth in Impact of Decrease in gross Increase in fixed 2017 Income from recurring revenues from curr

  15. Slide 15: A Zero-Debt Company, a Particularly Robust Balance Sheet

    FY 2017 Results A Zero-Debt Company, a Particularly Robust Balance Sheet In millions of euros FREE CASH FLOW AND BALANCE SHEET +40%  The company has no financial debt since 151.2 33.2 98.1 132.6 March 2015 23.8  Net cash and shareholders’ equity 75.7 reached record level  The Company will be able

  16. Slide 16: Share Price Increased by 25%

    FY 2017 Results Share Price Increased by 25% EVOLUTION FROM JANUARY 1, 2017 TO FEBRUARY 9, 2018, in euros 35 High June 5, 2017 AT FEBRUARY 9, 2018 €30.00 30  Share : €22.55  Market cap. : €712 million Lectra 25  Enterprise Value : €614 million +25%  EV/Revenues : 2.2x CAD Mid & Small +18%  EV/E

  17. Slide 17: Strong Increase in Trading Volume

    FY 2017 Results Strong Increase in Trading Volume VOLUME TRADED OWNERSHIP1 2016 2017 82.6% 17.4%  Volume traded on Euronext  Shares: 4.8 million 9.2 million  Capital: €69.1 million €216.7 million Including the disposal by André Harari of his entire shareholding in Lectra  Shares: 14.8 million 

  18. Slide 18: Dividend Raised to €0.38 per Share (+8.6%)

    FY 2017 Results Dividend Raised to €0.38 per Share (+8.6%) Cash preserved for future targeted FY 2017 DIVIDEND1 acquisitions €0.38 / share 41% of net income 1.5% yield2 Cash and cash equivalents, and the EVOLUTION OF THE DIVIDEND net cash €98.1 million3 CAGR FY 2017 vs. FY 2012-FY 2017 FY 2012 +12%

  19. Slide 19: Strategic Roadmap for 2017-2019

    Financial Results Q4 & FY 2017 Vision and Main Highlights Q4 2017 Results FY 2017 Results Strategic Roadmap for 2017–2019: First Progress Report 2018 Outlook 19 Lectra - Financial Results Q4 & FY 2017

  20. Slide 20: A Long-Term Vision

    Strategic Roadmap for 2017–2019: First Progress Report A Long-Term Vision Continuing to focus on the long term, Lectra’s 2017-2019 roadmap is the first step in the company’s development plans for the coming decade to become an indispensable player in Industry 4.0 On the whole, the first year of the

  21. Slide 21: Four Major Trends Will Shape Lectra's Market Sectors and Geographic Markets

    Strategic Roadmap for 2017–2019: First Progress Report Four Major Trends Will Shape Lectra’s Market Sectors and Geographic Markets MILLENNIALS DIGITALIZATION INDUSTRY 4.0 CHINA At the same time as pursuing their quest for operational excellence— more crucial today than ever—Lectra’s customers must a

  22. Slide 22: Industry 4.0: an Unprecedented Opportunity for Lectra

    Strategic Roadmap for 2017–2019: First Progress Report Industry 4.0: an Unprecedented Opportunity for Lectra SHIFT FROM MASS PRODUCTION TO PROFITABLE, LARGE SCALE PERSONALIZED PRODUCTION INDUSTRY 4.0 Industry 4.0 will encourage a Mass Mass growing number of companies to production customization crea

  23. Slide 23: Lectra, an Indispensable Player in Industry 4.0

    Strategic Roadmap for 2017–2019: First Progress Report Lectra, an Indispensable Player in Industry 4.0 The company has everything required to achieve this ambition 10 YEARS OF A COMBINATION OF 40 YEARS OF SAVOIR- EXPERIENCE IN THE STRONG BUSINESS MACHINES, SOFTWARE, FAIRE IN ELECTRONICS INDUSTRIAL I

  24. Slide 24: A Strategy Based on the Same Foundations as the Previous Roadmap

    Strategic Roadmap for 2017–2019: First Progress Report A Strategy Based on the Same Foundations as the Previous Roadmap CONTINUE TO FOCUS ACTIVITIES ON THREE MAIN MAINTAIN PREMIUM POSITIONING MARKET SECTORS FASHION AND AUTOMOTIVE FURNITURE APPAREL The company’s A strongly A market with a Primarily t

  25. Slide 25: An Offer With a Broader Scope for the Industry 4.0

    Strategic Roadmap for 2017–2019: First Progress Report An Offer With a Broader Scope for the Industry 4.0 2015 Start of the development of new 2016 Industry 4.0 compliant offers Lectra will accelerate the integration of available new technologies, will continue to develop new cloud services and will

  26. Slide 26: The Company Has Decided to Sell its Future Software Offers Exclusively with the SaaS Model

    Strategic Roadmap for 2017–2019: First Progress Report The Company Has Decided to Sell its Future Software Offers Exclusively with the SaaS Model EVOLUTION OF THE SOFTWARE SALES’ MODEL New software SaaS The company anticipates that most sales of its SaaS existing software over Customers the next two

  27. Slide 27: The Deployment of the SaaS Business Model Will Have a Negligible Impact

    Strategic Roadmap for 2017–2019: First Progress Report The Deployment of the SaaS Business Model Will Have a Negligible Impact on Revenues and Cash Position in the Short Term Miscellaneous  A limited portion will be transformed into recurring New CAD/CAM subscriptions over the next two years Consum

  28. Slide 28: Five Strategic Objectives for 2017-2019

    Strategic Roadmap for 2017–2019: First Progress Report Five Strategic Objectives for 2017-2019 To accelerate revenue growth, both organic and 1. through targeted acquisitions To accentuate Lectra’s technological leadership 2. and leverage new technologies to further enhance the value of its products

  29. Slide 29: Many Opportunities to Accelerate Growth

    Strategic Roadmap for 2017–2019: First Progress Report Many Opportunities to Accelerate Growth GROWTH ACCELERATORS China China: as the country upgrades its manufacturing plant and expands 1. its domestic market, supported by the Chinese government’s strategic ‘Made in China 2025’ initiative Leather:

  30. Slide 30: Reinforced R&D & Innovation Investment

    Strategic Roadmap for 2017–2019: First Progress Report Reinforced R&D & Innovation Investment EVOLUTION OF R&D INVESTMENT CAGR In millions of euros +9% +18% 26.6 1  During the course of the year, the company implemented an 25.6 innovation team, at a cost of €1 million in 2017 22.4 22.6  Employees

  31. Slide 31: Financial Objectives Focus on Revenue Growth and the Transformation to a SaaS Business Model

    Strategic Roadmap for 2017–2019: First Progress Report Financial Objectives Focus on Revenue Growth and the Transformation to a SaaS Business Model 2017-2019 FINANCIAL TARGETS Annual organic  These financial targets are based on purely organic 1 revenue growth growth and take into account expected

  32. Slide 32: Use of Available Cash

    Strategic Roadmap for 2017–2019: First Progress Report Use of Available Cash Lectra’s business Generating a high level of free cash flow and a structurally negative working capital requirement model Pursuit of the dividend payment policy Payout ratio of The Company has sufficient cash to finance fut

  33. Slide 33: Acquisition of Kubix Lab

    Strategic Roadmap for 2017–2019: First Progress Report Acquisition of Kubix Lab By combining the Lectra and Kubix Lab offers, Lectra will equip fashion customers with a revolutionary platform for managing product information  Founded at the end of 2015, Kubix Lab has developed a cutting- edge techn

  34. Slide 34: New Branding Identity for Lectra

    Strategic Roadmap for 2017–2019: First Progress Report New Branding Identity for Lectra Resolutely reflecting the digital era, Lectra’s new branding identity is inspired by Lectra’s strategy, customer-focused and anchored in Industry 4.0 concepts LECTRA’S VALUES Caring Committed Insightful Visionary

  35. Slide 35: 2018 Outlook

    Financial Results Q4 & FY 2017 Vision and Main Highlights Q4 2017 Results FY 2017 Results Strategic Roadmap for 2017–2019: First Progress Report 2018 Outlook 35 Lectra - Financial Results Q4 & FY 2017

  36. Slide 36: High Sensitivity to Exchange Rates

    2018 Outlook High Sensitivity to Exchange Rates CONVERSION OF 2017 RESULTS USING THE EXCHANGE RATES RETAINED FOR 2018 In millions of euros REVENUES INCOME FROM OPERATIONS 2018 SCENARIO -7.3 -4 The Company has based its 2018 scenarios on the 277.2 269.9 39.3 exchange rates in effect at 35.3 year-end

  37. Slide 37: Financial Objectives

    2018 Outlook Financial Objectives Growth in revenues Growth in income The Company entered 2018 with from operations before non-recurring items stronger than ever operating fundamentals and an even stronger 1 6% 10% 2 7% 15% balance sheet Change like-for-like The main uncertainty concerns the level o

  38. Slide 38: Upcoming Financial Calendar

    Upcoming Financial Calendar ANNUAL SHAREHOLDERS’ MEETING QUARTERLY FINANCIAL RESULTS ANALYST CONFERENCE April 27, 2018 October 31, 2018 Q1 April 26, 2018 Q2 July 25, 2018 Q3 October 30, 2018 Q4 February 12, 2019 38 Lectra - Financial Results Q4 & FY 2017

  39. Slide 39: Appendix

    Financial Results Q4 & FY 2017 Appendix 39 Lectra - Financial Results Q4 & FY 2017

  40. Slide 40: Financial Results Q4 2017 vs. Q4 2016

    Appendix Financial Results Q4 2017 vs. Q4 2016 Three Months Ended December 31 2017 2016 Changes 2017/2016 At 2016 Actual Actual Actual Like-for-like exchange rates (in thousands of euros) Revenues 71,489 74,550 69,418 +3% +7% Cost of goods sold (20,042) (20,260) (18,447) +9% +10% Gross profit 51,446

  41. Slide 41: Financial Results Q4 2017 vs. Q4 2016: Revenues by region

    Appendix Financial Results Q4 2017 vs. Q4 2016 Revenues by region Three Months Ended December 31 2017 2016 Changes 2017/2016 Actual % At 2016 Actual % Actual Like-for-like (in thousands of euros) exchange rates Europe, of which: 31,005 43% 31,055 27,865 40% +11% +11% - France 4,555 6% 4,550 4,435 6%

  42. Slide 42: Financial Results Q4 2017 vs. Q4 2016: Revenues by nature

    Appendix Financial Results Q4 2017 vs. Q4 2016 Revenues by nature Three Months Ended December 31 2017 2016 Changes 2017/2016 Actual % At 2016 Actual % Actual Like-for-like (in thousands of euros) exchange rates Revenues from new systems sales (1) 32,257 45% 33,705 30,523 44% +6% +10% Recurring reven

  43. Slide 43: Financial Results 2017 vs. 2016

    Appendix Financial Results 2017 vs. 2016 Twelve Months Ended December 31 2017 2016 Changes 2017/2016 At 2016 Actual Actual Actual Like-for-like exchange rates (in thousands of euros) Revenues 277,201 280,216 260,162 +7% +8% Cost of goods sold (75,269) (75,459) (68,417) +10% +10% Gross profit 201,932

  44. Slide 44: Financial Results 2017 vs. 2016: Revenues by region

    Appendix Financial Results 2017 vs. 2016 Revenues by region Twelve Months Ended December 31 2017 2016 Changes 2017/2016 Actual % At 2016 Actual % Actual Like-for-like (in thousands of euros) exchange rates Europe, of which: 117,050 42% 117,417 107,357 41% +9% +9% - France 18,400 7% 18,395 17,655 7%

  45. Slide 45: Financial Results 2017 vs. 2016: Revenues by nature

    Appendix Financial Results 2017 vs. 2016 Revenues by nature Twelve Months Ended December 31 2017 2016 Changes 2017/2016 Actual % At 2016 Actual % Actual Like-for-like (in thousands of euros) exchange rates Revenues from new systems sales (1) 123,057 44% 124,667 113,077 43% +9% +10% Recurring revenue

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