Lectra SA · EURONEXT:LSS
Lectra SA — Q3 2017 Earnings Presentation
37 slides from Lectra SA's earnings presentation, Oct 31, 2017
Slide 1: Analyst Conference
ANALYST CONFERENCE Paris, October 31, 2017 Daniel Harari, Chairman & CEO Jérôme Viala, Executive Vice President
Slide 2: Analyst Conference – Paris, October 31, 2017
Analyst Conference – Paris, October 31, 2017 Financial Results for Q3 2017 Financial Results for 9M 2017 Reminder of the New Strategic Roadmap for 2017-2019 2017 Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2017 figures restated at 2016 exchange rates) Analyst Conference – Paris
Slide 3: Strong Growth in Orders for New Systems
Strong Growth in Orders for New Systems Orders for new systems Orders for new systems totaled €26.5 million (in millions of euros) New CAD/CAM and PLM software licenses: €3.4 million (+4%) 26.5 CAD/CAM equipment and accompanying software: +15% €19.3 million (+17%) 23.7 Training and consulting:
Slide 4: Revenues and Earnings Impacted by Variations in Exchange Rates
Revenues and Earnings Impacted by Variations in Exchange Rates Q3 2017 Q3 2017 Q3 2016 Change at actual Change like-for-like Actual At 2016 Actual exchange rates In millions of euros exchange rates €M % €M % Revenues 67.2 69.1 64.4 +2.8 +4% +4.7 +7% New systems 29.9 30.8 28.0 +2.0 +7% +2.8 +10% Recu
Slide 5: Analyst Conference – Paris, October 31, 2017
Analyst Conference – Paris, October 31, 2017 Financial Results for Q3 2017 Financial Results for 9M 2017 Reminder of the New Strategic Roadmap for 2017-2019 2017 Outlook Unless stated otherwise, comparisons are “like-for-like” (2017 figures restated at 2016 exchange rates) Analyst Conference – Paris
Slide 6: Strong Increase in Orders
Strong Increase in Orders 9M 2017 9M 2016 Change Change Actual Actual 9M 2017 / 9M 2017 / Orders (in millions of euros) 9M 2016 9M 2016 At actual Like-for-like exchange rates Total 90.8 80.4 +13% +13% Of which New CAD/CAM and PLM software licenses 11.9 10.7 +11% +11% CAD/CAM equipment and accompanyi
Slide 7: Strong Increase in Europe and in All Market Sectors
Strong Increase in Europe and in All Market Sectors Stability in Asia-Pacific, improvement in all the other regions Europe (40% of total orders): +25% Asia-Pacific (34%): stable 39% 39% □ Of which China (12%): -16%; Asean (11%): +11% 61% 61% Americas (20%): +13% □ North America (16%): +7% □ So
Slide 8: Revenues and Income From Operations in Line with the Company's Objectives
Revenues and Income From Operations in Line with the Company’s Objectives 9M 2017 9M 2017 9M 2016 Change at actual Change like-for-like Actual At 2016 Actual exchange rates In millions of euros exchange rates €M % €M % Revenues 205.7 205.7 190.7 +15.0 +8% +14.9 +8% New systems 90.8 91.0 82.6 +8.2 +1
Slide 9: Growth in Revenues from New Systems Sales and in Recurring Revenues
Growth in Revenues from New Systems Sales and in Recurring Revenues Increase in total revenues: +€14.9 million (+8%) Revenues from new systems sales: +10% New CAD/CAM and PLM software licenses: +10% €12.4 million (+18%) CAD/CAM equipment and accompanying software: 90.8 €67.0 million (+8%) 82.6
Slide 10: Lectra Continued to Invest in R&D
Lectra Continued to Invest in R&D R&D investments 9M 2017 R&D costs (€18.8 million) represented 9.1% of In millions of euros revenues (€16.7 million and 8.7% for 9M 2016) +14% 25.8 Net R&D costs1: €12.9 million (€11.5 million for 9M 2016) 21.7 22.4 22.6 300 engineers (19% of workforce) dedicated
Slide 11: Innovations Endorsed by Lectra's Customers
Innovations Endorsed by Lectra’s Customers HMT Les Enphants Global Safety Textiles FocusQuantum Kaledo, Modaris, FocusQuantum Lectra Fashion PLM Find out these testimonials on lectra.com B&B Italia Dassault Falcon Jet Versalis DesignConcept, Versalis Analyst Conference – Paris, October 31, 2017 11
Slide 12: High Level of Free Cash Flow Continues to Reflect the Relevance of Lectra's Business Model
High Level of Free Cash Flow Continues to Reflect the Relevance 30,0 of Lectra’s Business Model 30,0 In millions of euros 9M 2017 free cash flow: +72%1 25,5 25,5 25,5 20,7 Cash flow provided by operating activities: €24.2 million (including 20,7 €3.1 million increase in the working capital require
Slide 13: A Structurally Negative Working Capital Requirement
A Structurally Negative Working Capital Requirement, a Key Feature of Lectra’s Business Model In millions of euros, at December 31, except 2017 (at September 30) Working capital requirement was €1.5 million This includes the receivable of €23.6 million on the 10 French tax administration (Trésor p
Slide 14: A Zero-Debt Company, Shareholders' Equity and Net Cash Position Further Reinforced
A Zero-Debt Company, Shareholders’ Equity and Net Cash Position Further Reinforced At September 30, 2017 In millions of euros, at December 31, except 2017 (at September 30) 140 Shareholders’ equity: €141.8 million €132.6 million at December 31, 2016 120 Net cash: €84.0 million 100 €75.7 million
Slide 15: Strong Increase in the Share Price
Strong Increase in the Share Price Share price Evolution from January 1, 2016 to October 27, 2017 (in euros, daily closing price and index) October 27, 2017: €26.50 9M 2017 32 Lectra: +119% □ High (June 5): €30.00 □ Low (January 5): €16.89 28 □ Volume traded on Euronext 24 Shares: 7.4 million
Slide 16: Analyst Conference – Paris, October 31, 2017
Analyst Conference – Paris, October 31, 2017 Financial Results for Q3 2017 Financial Results for 9M 2017 Reminder of the New Strategic Roadmap for 2017-2019 2017 Outlook Analyst Conference – Paris, October 31, 2017 16
Slide 17: A Long-Term Vision
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 Analyst Conference – Paris, October 31, 2017 17
Slide 18: Four Major Trends Will Impact Lectra Customers Significantly
Four Major Trends Will Impact Lectra Customers Significantly Across the world, Lectra’s customers face changing economic and societal conditions The Millennials The emergence of Industry 4.0 China’s The digitalization evolving of business economy Analyst Conference – Paris, October 31, 2017 18
Slide 19: Millennials Will Transform the Global Economy
Millennials Will Transform the Global Economy The largest generation of working age in history Born between 1980 and 2000 The largest number of consumers in the world, in a few years Digital natives, connected and social Attracted to personalized goods or services Expect quality while seeking out th
Slide 20: Digitalization Will Force Companies to Reinvent Themselves
Digitalization Will Force Companies to Reinvent Themselves Digitalization is set to have a greater impact on organizations than the Internet IoT New business models Cloud AR/VR DATA Mobile Operational AI excellence Analyst Conference – Paris, October 31, 2017 20
Slide 21: With Industry 4.0, Factories Will be at Heart of the Value Chain
With Industry 4.0, Factories Will be at Heart of the Value Chain New opportunities linked to the digitalization of industrial processes, from design to production Real-time communication between different participants, objects, production lines and services Increased flexibility while making better
Slide 22: China's Evolving Economy Will Have Global Consequences
China’s Evolving Economy Will Have Global Consequences Transition towards a new growth model PRODUCTIVITY CONSUMPTION ADDED-VALUE New opportunities, but also substantial challenges, for both Chinese and non-Chinese companies in all industries Analyst Conference – Paris, October 31, 2017 22
Slide 23: The Impact of These Mega-Trends Will Considerably Increase
The Impact of These 4 Mega-Trends, Already Perceptible, Will Considerably Increase These major trends represent challenges for Lectra customers They need to accelerate their Consumers’ requirements implementation of the vital call for new organizations technologies required to and practices that are
Slide 24: Industry 4.0: an Unprecedented Opportunity for Lectra
Industry 4.0: an Unprecedented Opportunity for Lectra Industry 4.0 calls for the integration of smart solutions and services, and the replacement of production tools incompatible with connected factories’ concepts Shift from mass production to profitable, Factories are at the heart of this new large
Slide 25: Lectra, an Indispensable Player in Industry 4.0
Lectra, an Indispensable Player in Industry 4.0 Lectra is in a formidable position to help customers step into this new industrial age 10 YEARS OF A COMBINATION OF 40 YEARS OF SAVOIR- EXPERIENCE IN THE STRONG BUSINESS MACHINES, SOFTWARE, FAIRE IN ELECTRONICS INDUSTRIAL INTERNET EXPERTISE SERVICES AN
Slide 26: Many Opportunities to Accelerate Growth
Many Opportunities to Accelerate Growth In addition to Industry 4.0 and SaaS offers, Lectra is counting on the following accelerators to boost its growth Analyst Conference – Paris, October 31, 2017 26
Slide 27: Five Strategic Objectives for 2017-2019
Five Strategic Objectives for 2017-2019 To accelerate revenue growth, both organic and through targeted acquisitions To accentuate Lectra’s technological leadership and leverage new technologies to further enhance the value of its products and services offer To strengthen Lectra’s competitive positi
Slide 28: A Strategy Based on the Same Foundations
A Strategy Based on the Same Foundations The 2017-2019 roadmap was framed to enable Lectra to consolidate its global leadership within this new context and achieve sustained growth, while maintaining short-term profitability Continue to focus activities on three main Maintain premium positioning mar
Slide 29: An Offer With a Broader Scope for the Industry 4.0
An Offer With a Broader Scope for the Industry 4.0 Lectra will accelerate the integration of available new technologies to hold onto its competitive edge. The company will continue to develop new cloud services and will adapt its equipment to Industry 4.0’s best practices New perspectives for produc
Slide 30: A Roadmap Implemented in Three Phases
A Roadmap Implemented in Three Phases Lectra has been working on its new Industry 4.0 compatible offer since 2015 2017 2018 2019 2015-2016 DEVELOPMENT OF TESTS WITH PROGRESSIVE ENHANCEMENT OF NEW INDUSTRY 4.0 SELECTED COMMERCIAL THE OFFERS FULLY COMPLIANT CUSTOMERS LAUNCH OFFERS Several Fashion & ap
Slide 31: Reinforced R&D Investment
Reinforced R&D Investment Lectra will continue to invest actively in innovation to reinforce its competitive leadership and value proposition +50% 10% in 2019 vs. 2016 8.7% 2017-2019 New profiles: 270 R&D DevOps, Cloud engineers R&D investments Architect, Data end-2016 2016 (in % of revenues) Scient
Slide 32: A Transition to a SaaS Business Model With no Material Impact on Cash Position
A Transition to a SaaS Business Model With no Material Impact on Cash Position Lectra will afford customers greater flexibility through subscription or pay-per-use based access to its software offer 2016 revenues by type of business New CAD/CAM and Progressively transformed PLM software licenses int
Slide 33: A New Revolutionary Offer, Respecting Industry 4.0 Principles
A New Revolutionary Offer, Respecting Industry 4.0 Principles This new SaaS offer will complete the actual software and CAD/CAM equipment offer SaaS Industry-specific Software & services + DATA ANALYSIS NEW BEST PRACTICES AND TECHNOLOGY EXPLOITATION Analyst Conference – Paris, October 31, 2017 33
Slide 34: Financial Objectives Focus on Revenue Growth and the Transformation to a SaaS Business Model
Financial Objectives Focus on Revenue Growth and the Transformation to a SaaS Business Model 2017-2019 Financial targets These financial targets are based on purely organic growth and take into account expected macroeconomic conditions, and the impact of 6-12% Annual organic revenue developments rel
Slide 35: Analyst Conference – Paris, October 31, 2017
Analyst Conference – Paris, October 31, 2017 Financial Results for Q3 2017 Financial Results for 9M 2017 Reminder of the new strategic roadmap for 2017-2019 2017 Outlook Analyst Conference – Paris, October 31, 2017 35
Slide 36: 2017 Outlook
2017 Outlook The Company entered 2017 with stronger than ever operating fundamentals and an even stronger balance sheet Nevertheless, persistent macroeconomic, geopolitical, political and currency uncertainties, together with increased risk, continue to weigh heavily on businesses’ investment deci
Slide 37: Upcoming Financial Calendar
Upcoming Financial Calendar FY 2017 Financial Results February 12, 2018 Analyst Conference February 13, 2018 lectra.com Analyst Conference – Paris, October 31, 2017 37