Lectra SA · EURONEXT:LSS
Lectra SA — FY2020 Earnings Presentation
45 slides from Lectra SA's earnings presentation, Feb 11, 2021
Slide 1: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 Daniel Harari, Chairman & CEO Jérôme Viala, Executive Vice President February 11, 2021
Slide 2: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2020 figures restated at 2019 exchange rates)
Slide 3: 2020 main highlights
2020 main highlights Strong resilience of A business model that Continued adoption of earnings despite the once again the offers for the impacts of the demonstrates its Industry 4.0 COVID-19 crisis strength 3 Lectra - Financial results Q4 & FY 2020
Slide 4: 2020 main highlights
2020 main highlights Different impact of the COVID-19 crisis depending on the market sector Fashion Automotive Furniture All businesses (brands, subcontractors, A severe shock to a market having already The home has become a central part of retailers) face profound changes and an faced difficulties
Slide 5: Main measures taken by Lectra to face the crisis
2020 main highlights Main measures taken by Lectra to face the crisis Safeguard the health of Guarantee the continuity Pursue the execution of employees, customers of service to customers the Lectra 4.0 strategy and suppliers Strengthen customer In light of its sound financial position, relations an
Slide 6: Mobilization of Lectra's teams to produce protective equipment
2020 main highlights Mobilization of Lectra’s teams to produce protective equipment voluntarily 15,000 GOWNS cut for hospitals and teaching hospitals 390,000 MASKS cut for the general public, 190,000 of which for the French initiative “United masks” 6 Lectra - Financial results Q4 & FY 2020
Slide 7: Signs of improvement in Q3, confirmed in Q4
2020 main highlights Following a strongly impacted H1 by the COVID-19 crisis, several signs of improvement observed in Q3, confirmed in Q4 Orders for perpetual software licenses, New software subscription orders Revenues from consumables and parts equipment and accompanying software, and non-recurri
Slide 8: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2020 figures restated at 2019 exchange rates)
Slide 9: Q4 2020 results: Growth in orders
Q4 2020 results Growth in orders Orders for perpetual software licenses, equipment New software subscription and accompanying software, and non-recurring orders services In millions of euros, annual value In millions of euros +53% +1% 1,1 1.1 28.4 27.7 0.7 Q4 19 Q4 20 Q4 19 Q4 20 While overall busin
Slide 10: Revenues and earnings still impacted by the COVID-19 crisis
Q4 2020 results Revenues and earnings still impacted by the COVID-19 crisis In millions of euros Revenues Income from operations before non-recurring items $/€1 exchange rate At actual exchange rates At actual exchange rates Like-for-like Like-for-like -12% -8% -10% +5% 1.19 74.2 74.2 11.7 65.6 68.4
Slide 11: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2020 figures restated at 2019 exchange rates)
Slide 12: Negative impact of currency changes
FY 2020 results Negative impact of currency changes Conversion of 2020 results using the 2019 exchange rates With an average exchange rate of In millions of euros $1.14/€1 in 2020, the US dollar was down 2% compared to 2019. The slide Income from operations Revenues in the dollar intensified late in
Slide 13: Orders down overall, strong growth in software subscription sales
FY 2020 results Orders down overall, strong growth in software subscription sales Orders for perpetual software licenses, equipment and accompanying New software subscription software, and non-recurring services orders In millions of euros In millions of euros, annual value -22% +55% 107.8 2.9 2019
Slide 14: Contrasted geographical activity
FY 2020 results Contrasted geographical activity AMERICAS EUROPE ASIA-PACIFIC -24% -32% +18% 40.1 40.4 19.7 30.5 17.5 27.0 2019 2020 2019 2020 2019 2020 REST OF THE WORLD Orders for perpetual software -45% 9% 6% licenses, equipment and 16% 9.8 accompanying software, and non- 37% 24% 37% 5.3 recurrin
Slide 15: Decline in orders in fashion and automotive
FY 2020 results Decline in orders in fashion and automotive – Slight increase in furniture and other industries Orders for perpetual software licenses, equipment and accompanying software, and non-recurring services In millions of euros 107.8 4% +5% 14% 82.6 Change +1% 6% 31% 18% § Europe -34% -26%
Slide 16: Strong resilience in earnings and free cash flow
FY 2020 results Strong resilience in earnings and free cash flow, despite the consequences of the health crisis In millions of euros Revenues Overhead costs $/€1 exchange rate At actual exchange rates Like-for-like At actual exchange rates Like-for-like -16% -14% -8% -7% 1.14 280.0 280.0 236.2 240.6
Slide 17: Slight increase in recurring contracts
FY 2020 results Slight increase in recurring contracts Revenues from software licenses, equipment and Recurring revenues accompanying software, and non-recurring services In millions of euros In millions of euros Recurring contracts Consumables and parts -28% +3% -15% Recurring revenues are a key pi
Slide 18: Resilient income from operations
FY 2020 results Resilient income from operations Evolution of income from operations before non-recurring items In millions of euros Lectra has implemented 40.9 measures to reduce its overhead costs, which were initially budgeted to increase by 8% in 2020 (-7% 2020 vs. 2019), by cancelling or +6.2 2
Slide 19: Free cash flow higher than net income
FY 2020 results Free cash flow higher than net income In millions of euros 36.2 Free cash flow amounted to €25.2m (€36.2m in 2019). Free cash flow exceeded net income by €7.6m in 29.3 2020. 25.2 17.6 The decline in free cash flow from 2019 (-€11m) was slightly less than the decline in net income (-€
Slide 20: Particularly robust balance sheet
FY 2020 results Particularly robust balance sheet Balance sheet In millions of euros 192.2 183.0 134.6 The group has no financial debt. 120.6 Net cash is close to €135m. 31/12/19 31/12/20 31/12/19 31/12/20 Net cash Shareholders' equity 20 Lectra - Financial results Q4 & FY 2020
Slide 21: Evolution of the share price
FY 2020 results Evolution of the share price Evolution from January 1, 2020 to February 5, 2021 In euros, closing price 30 Highest January 13, 2021 €25.30 LECTRA AT FEBRUARY 5, 2021 +6% 25 CAC MID & SMALL n Share price: €24.45 +1% CAC 40 n Market cap.: €795m 20 -6% n Enterprise Value: €660m n EV/202
Slide 22: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook 22 Lectra - Financial results Q4 & FY 2020
Slide 23: Acceleration towards Industry 4.0
Strategic roadmap for 2020-2022: first progress report Acceleration towards Industry 4.0 The objective of Lectra through its 2020-2022 strategic roadmap is to capture the full potential of its new offers for Industry 4.0, while delivering sustainable, profitable business growth. Despite the conseque
Slide 24: Four strategic priorities
Strategic roadmap for 2020-2022: first progress report Four strategic priorities 1 Accelerate organic 2 Strengthen customer growth relations Extend the offers for Develop new areas for Industry 4.0 growth 3 4 These four strategic priorities guided the Group's action in 2020. 24 Lectra - Financial re
Slide 25: Growing adoption of the offers for Industry 4.0
Strategic roadmap for 2020-2022: first progress report Growing adoption of the offers for the Industry 4.0 Number of customers using one or several offers for the Industry 4.0 270 +146 +96 124 This success confirms the 28 relevance of Lectra's strategy and choices since 2018 2019 2020 2017. These of
Slide 26: New 4.0 offers meet companies' long-term needs
Strategic roadmap for 2020-2022: first progress report New 4.0 offers meet companies’ long-term needs Riccardo Romani “Having enjoyed years of solid and fruitful partnership Head of International Production with Lectra, we have decided to choose them again “We were looking for a partner in for their
Slide 27: Addition of a fifth strategic priority
Strategic roadmap for 2020-2022: first progress report Addition of a fifth strategic priority1 1 Accelerate organic 2 Strengthen customer growth relations Capture all synergies arising + from the acquisition of Gerber Technology Extend the offers for Industry 4.0 Develop new areas for growth 5 3 4 1
Slide 28: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook Unless stated otherwise, comparisons are ‘like-for-like’ (2020 figures restated at 2019 exchange rates)
Slide 29: Lectra's ambition: a world-class, leading Industry 4.0 player
Gerber Technology acquisition project Lectra’s ambition: to create a world-class, leading Industry 4.0 player for the fashion, automotive and furniture markets EMPOWERING SERVES CUSTOMERS CUSTOMERS FROM END-TO-END THROUGH ACROSS THE DESIGN- INDUSTRIAL TO-CUT WORKFLOW INTELLIGENCE FOR FLEXIBLE MATERI
Slide 30: Transaction rationale
Gerber Technology acquisition project Transaction rationale Strengths Opportunities Strengths − Very solid presence in Europe and strong − Very solid presence in North America position in Asia-Pacific − Highly complementary customer bases and and strong position in Asia-Pacific geographic market pos
Slide 31: Benefits from combining strengths and competencies
Gerber Technology acquisition project Benefits from combining strengths and competencies Global leader in value and volume, with world-class customers and leadership around the world Industry’s most capable player to help fashion, automotive and furniture companies seize the opportunities of the Ind
Slide 32: Envisioned transaction overview
Gerber Technology acquisition project Envisioned transaction overview Anticipated − Acquisition price, on a cash-free debt-free basis: €175m (cash+debt combined) and shares (5m newly issued to AIPCF VI LG, an affiliate of transaction American Industrial Partners that is Gerber Technology’s sole shar
Slide 33: Gerber Technology overview
Gerber Technology acquisition project Gerber Technology overview Gerber Technology builds enterprise-wide solutions for automating the design and production of flexible materials based on its proprietary technologies, deep domain expertise, and multi-decade customer relationships €165 million 2020 r
Slide 34: Complementary customer base
Gerber Technology acquisition project Complementary customer base 34 Lectra - Financial results Q4 & FY 2020
Slide 35: A large combined installed base
Gerber Technology acquisition project A large combined installed base, with upgrade and Industry 4.0 opportunities Software sold in Equipment and Software sold in SaaS perpetual licenses accompanying software mode 1,700 13,000 Industry 4.0 licenses under compatible €2.2m contract 2020 revenues 3,400
Slide 36: Combining two financially strong and efficient companies
Gerber Technology acquisition project Combining two financially strong and efficient companies 2020 revenues and earnings of both companies were impacted by the COVID-19 crisis 2020 Aggregated1, pre-synergies Total revenues €236m €165m €401m Recurring revenues €159m €98m €256m Recurring revenues as
Slide 37: A worldwide, well-balanced presence
Gerber Technology acquisition project A worldwide, well-balanced presence Aggregated revenues1, pre-synergies €78 million €67 million 2020 revenues from perpetual software licenses, €145 million 2020 revenues from perpetual software licenses, equipment and accompanying software, 2020 revenues from p
Slide 38: Strong value creation from synergies
Gerber Technology acquisition project Strong value creation from synergies Cross-sell opportunities Fixed costs optimization Channel optimization Customer support structure Supply chain & procurement Team consolidation Revenues & Gross profit Overhead costs +€12-18 million Expected increase in EBITD
Slide 39: Combination will benefit all stakeholders
Gerber Technology acquisition project Combination will benefit all stakeholders − Greater capabilities and resources to address customer needs Customers − Combined R&D benefiting to both companies’ customers − Increased interoperability between both companies’ solutions Employees − More opportunitie
Slide 40: Financial results Q4 & FY 2020
Financial results Q4 & FY 2020 § 2020 main highlights § Q4 2020 results § FY 2020 results § Strategic roadmap for 2020-2022: first progress report § Gerber Technology acquisition project § Outlook 40 Lectra - Financial results Q4 & FY 2020
Slide 41: 2022: combined financial objectives
Outlook 2022: Lectra and Gerber Technology’s combined financial objectives Combined revenues Combined EBITDA margin before non-recurring items1 In millions of euros Return to the 482 401 2019 level 17% to 20% Including the effect of the synergies that should have an impact of between +€12m and +€18m
Slide 42: 2021: external factors weighing on the outlook
Outlook 2021: external factors weighing on the outlook Before taking the acquisition of Gerber Technology into account Uncertain macroeconomic environment, coronavirus Impact of exchange rate fluctuations epidemic, degraded financial situations These items could weigh on customers' investment 2021 s
Slide 43: 2021: financial objectives
Outlook 2021: financial objectives Before taking the acquisition of Gerber Technology into account Revenues €250m to €268m +9% to +17% Like-for-like Income from operations before non-recurring items €27m to €34m +27% to +60% Based on the order backlog at December 31, 2020, revenues and income from o
Slide 44: Upcoming Financial Calendar
Upcoming Financial Calendar Annual Shareholders’ Quarterly results Analyst conferences Meeting April 30, 2021 Q1 April 29, 2021 October 28, 2021 Q2 July 29, 2021 February 10, 2022 Q3 October 27, 2021 Q4 February 9, 2022 Lectra - Financial results Q4 & FY 2020 44
Slide 45: Empowering customers through industrial intelligence
LeCrRaA. Empowering customers through industrial intelligence