Lectra SA · EURONEXT:LSS

Lectra SA — FY2016 Earnings Presentation

55 slides from Lectra SA's earnings presentation, Feb 10, 2017

  1. Slide 1: Analyst Conference, Paris, February 10, 2017

    ANALYST CONFERENCE Paris, February 10, 2017 André Harari, Chairman of the Board of Directors Daniel Harari, Chief Executive Officer Jérôme Viala, Executive Vice President, Chief Financial Officer

  2. Slide 2: Analyst Conference agenda

    Analyst Conference – Paris, February 10, 2017 Financial Results for Q4 2016 Financial Results for FY 2016 Assessment of the 2013–2016 Strategic Roadmap New Strategic Roadmap for 2017–2019 2017 Outlook Detailed comparisons between 2016 and 2015 are based on 2015 exchange rates (“like-for-like”) unles

  3. Slide 3: Q4 2016: Record Orders for New Systems

    Q4 2016: Record Orders for New Systems Orders for New Systems Orders for new systems totaled €35.2 million (in millions of euros)  An increase of €3.1 million (+10%) compared with Q4 2015 □ New software licenses: €6.8 million (+3%) 35.2 □ CAD/CAM equipment: €23.9 million (+10%) 32.1 +10% □ Training

  4. Slide 4: Q4 2016: Continuing Growth in Revenues and Earnings

    Q4 2016: Continuing Growth in Revenues and Earnings Q4 2016 Q4 2016 Q4 2015 Change at actual Change like-for-like Actual At 2015 Actual exchange rates In millions of euros exchange rates €M % €M % Revenues 69.4 68.9 62.2 +7.2 +12% +6.8 +11% New systems 30.5 30.2 26.0 +4.5 +17% +4.1 +16% Recurring 38

  5. Slide 5: Analyst Conference agenda

    Analyst Conference – Paris, February 10, 2017 Financial Results for Q4 2016 Financial Results for FY 2016 Assessment of the 2013–2016 Strategic Roadmap New Strategic Roadmap for 2017–2019 2017 Outlook Detailed comparisons between 2016 and 2015 are based on 2015 exchange rates (“like-for-like”) unles

  6. Slide 6: Tough Macroeconomic Conditions

    Tough Macroeconomic Conditions The company stated that it entered 2016 with even more solid operating fundamentals than in 2015 and an even stronger balance sheet  Lectra’s newly formed sales teams were expected progressively to build momentum  It further stated that the outlook for the year looke

  7. Slide 7: Strong Growth in Orders for New Systems

    Strong Growth in Orders for New Systems 2016 2015 Change Change Orders Actual Actual 2016 / 2015 2016 /2015 (in millions of euros) At actual Like-for-like exchange rates Total 115.6 102.4 +13% +13% Of which New software licenses 25.1 23.7 +6% +6% CAD/CAM equipment 75.3 64.2 +17% +17% Training and co

  8. Slide 8: Very Strong Growth in Asia-Pacific and Automotive

    Very Strong Growth in Asia-Pacific and Automotive Highly contrasted situation  Asia-Pacific (39% of total orders): +47%* □ Of which China (15%): +25% 41% 40%  Europe (38%): +18% 59% 60%  Americas (18%): -26%* □ North America (15%): -21% □ South America (2%): -44%  Other countries (6%): -1% 2015

  9. Slide 9: Revenues and Earnings Up Sharply, in Line with Roadmap

    Revenues and Earnings Up Sharply, in Line with the Company’s Roadmap 2016 2016 2015 Change at actual Change like-for-like Actual At 2015 Actual exchange rates In millions of euros exchange rates €M % €M % Revenues 260.2 261.4 237.9 +22.3 +9% +23.6 +10% New systems 113.1 113.1 99.4 +13.7 +14% +13.7 +

  10. Slide 10: Sharp Increase in Revenues and in Order Backlog

    Sharp Increase in Revenues and in Order Backlog Increase in total revenues +€23.6 million (+10%) Revenues from new systems sales (43% of total revenues): €113.1 million (+14%) In millions of euros +14%  New software licenses: €24.5 million (+4%)  CAD/CAM equipment: €74.7 million (+22%) 113.1  Tra

  11. Slide 11: Increase in Recurring Revenues Finances Increase in Fixed Overhead Costs

    Increase in Recurring Revenues Finances Increase in Fixed Overhead Costs In millions of euros, at actual exchange rates +5.5 +7.2 Increase in recurring revenues 37.3 31.8 +5.9 Increase in revenues from new systems sales (0.4) Adverse impact of currency fluctuations (1.3) Decrease in gross profit mar

  12. Slide 12: Lectra Continued to Invest Steadfastly in R&D

    Lectra Continued to Invest Steadfastly in R&D R&D investments R&D costs represented 8.7% of 2016 revenues In millions of euros (9.4% in 2015) 21.7 22.4 22.6  Net R&D costs*: €15.5 million (€14.3 million in 2015) 19.1  270 engineers (17% of workforce) dedicated to R&D 17.4 €103 million invested ove

  13. Slide 13: Free Cash Flow Reflects Pertinence of Business Model

    Free Cash Flow Continues to Reflect the Pertinence of Lectra’s Business Model In millions of euros 2016 free cash flow: €23.8 million* (+10%) 26.7  Cash flow provided by operating activities: €30.5 million (including a €2.2 million increase in the working capital requirement) 23.4 23.8 21.5  Capit

  14. Slide 14: A Zero-Debt Company, Shareholders' Equity and Net Cash Position Reinforced

    A Zero-Debt Company, Shareholders’ Equity and Net Cash Position Further Reinforced On December 31, 2016 In millions of euros, on December 31 140 Shareholders’ equity: €132.6 million  €113.0 million on December 31, 2015 120 Net cash: €75.7 million 100  After payment of the dividend of €9.3 million

  15. Slide 15: A Structurally Negative Working Capital Requirement

    A Structurally Negative Working Capital Requirement, a Key Feature of Lectra’s Business Model In millions of euros, on December 31 Working capital requirement on December 31, 2016 was negative at 20 €1.3 million 15  This includes the receivable of €21.6 million on the 10 French tax administration (

  16. Slide 16: Dividend Raised to €0.35 per Share (+17%)

    Dividend Raised to €0.35 per Share (+17%) The Board of Directors will propose to the Ordinary Shareholders’ Meeting of April 28, 2017 to increase the dividend to €0.35 per share in respect of FY 2016  The company had declared a dividend of €0.30 per share in respect of FY 2015, of €0.25 per share i

  17. Slide 17: Strong Increase in Share Price

    Strong Increase in Share Price Evolution from January 1, 2016 to February 8, 2017 Share price (in euros, daily closing price and index)  February 8, 2017: €18.00  2016 Lectra: +49% 18 □ High (December 29): €18.32 □ Low (February 11): €10.76 16 □ Volume traded on Euronext  Shares: 4.8 million (-45

  18. Slide 18: Analyst Conference agenda

    Analyst Conference – Paris, February 10, 2017 Financial Results for Q4 2016 Financial Results for FY 2016 Assessment of the 2013–2016 Strategic Roadmap New Strategic Roadmap for 2017–2019 2017 Outlook Analyst Conference – Paris, February 10, 2017 18

  19. Slide 19: End-2009: Launch of Lectra 3.0 Strategy

    End-2009: Launch of Lectra 3.0 Strategy This strategy aimed at safeguarding the company’s financial condition, fundamentally rethinking its value proposition and positioning, and enabling it to emerge stronger from the economic and financial crisis Its five overriding objectives have remained unchan

  20. Slide 20: 2016: A Successful Company Transformation

    2016: A Successful Company Transformation These roadmaps were supported by a transformation plan and €50 million in investments for the future, fully expensed, over the 2012-2015 period, which consisted of three components  A major recruitment plan to strengthen sales and marketing teams  The addi

  21. Slide 21: Teams Ready to Build the Future

    Teams Ready to Build the Future An extensive renewal and increase of teams  42% of the workforce joined Lectra in the last five years Workforce by function 2011 2011 (%) 2016 2016 (%) Evolution Sales, marketing 214 16% 321 21% x1.5 Services 451 34% 481 31% R&D 218 16% 270 17% x1.2 Purchasing, produ

  22. Slide 22: Fundamental Advances in Technology

    Fundamental Advances in Technology Since 2013, the company invested €86 million in R&D, representing 9.4% of revenues  Fully expensed These investments enabled Lectra to  Enrich the software offer for fashion and apparel with new versions of its flagship solutions Kaledo, Modaris, Diamino and Lect

  23. Slide 23: Lectra Fashion PLM Regarded as One of the Best PLM Solutions

    Lectra Fashion PLM Regarded as One of the Best PLM Solutions on the Market “Lectra’s technology is among the best the industry has to offer; its roadmap is clear; and its extended Fashion Platform reveals a persuasive vision” (December 2016) Thanks to its 40 years of experience and its deep knowledg

  24. Slide 24: Since 2007, Vector is the Undisputed Reference in Fabric Cutting

    Since 2007, Vector is the Undisputed Reference in Fabric Cutting In 2007, Lectra revolutionized automated fabric cutting  The new Vector generation constituted a genuine technological leap forward, setting new standards for cutting speed, quality and reliability  It enabled Lectra to increase mark

  25. Slide 25: Versalis is a Major Breakthrough in Leather Cutting

    Versalis is a Major Breakthrough in Leather Cutting In 2011-2012, Lectra launched Versalis for leather cutting  A technological revolution, this new range offers fashion, automotive and furniture manufacturers an unprecedented optimization of productivity and material management The offer was exten

  26. Slide 26: FocusQuantum Sets New Standards in Airbag Cutting

    FocusQuantum Sets New Standards in Airbag Cutting FocusQuantum is a comprehensive and connected solution, combining laser cutter, software suite and high value-added services  Leveraging Lectra’s innovative strength and 30 years of experience in laser cutting for airbags  This solution with zero p

  27. Slide 27: Reinforcing Lectra's Image and Reputation

    Reinforcing Lectra’s Image and Reputation Click to see online content Global automotive campaign: Those who Videos demand more, demand Lectra Global furniture campaign: Make it with Lectra Website Global fashion campaign: Fashion’s best kept secret Analyst Conference – Paris, February 10, 2017 27

  28. Slide 28: Lectra's Campus: a Total Re-Think

    Lectra’s Campus: a Total Re-Think Lectra’s Bordeaux-Cestas campus – emblematic of the company’s strategy and a showcase for its expertise – was extended and totally refurbished  A privileged venue for dialogue and international gatherings, the campus welcomes customers’ events all year long  Lectr

  29. Slide 29: An Expanded Global Footprint

    An Expanded Global Footprint Subsidiaries opened in South Korea (2014) and in Vietnam (2016), two of the most dynamic economies in Asia, expanded Lectra’s unique international network (33 fully-owned subsidiaries)  None of Lectra’s competitors have the same network  This network enables Lectra to

  30. Slide 30: A Fully Operational Organization to Execute the New Roadmap

    A Fully Operational Organization to Execute the New Roadmap The composition and missions for members of the Executive Commitee evolved, going a step further to fulfill Lectra 3.0 strategy and to prepare for the future  Jérôme Viala was promoted to Executive Vice President on January 1, 2017; Jérôme

  31. Slide 31: Strong Increase in Revenues Across all Product Lines

    Strong Increase in Revenues Across all Product Lines New systems: +33% Recurring: +30% Total: +31% 113.1 147.1 260.2 11.6 85.3 +48% 113.1 198.4 64 113.1 7.8 +40% +33% 45.6 85.3 +43% 74.7 52.2 +23% 83.1 +30% 147.1 67.5 113.1 23.4 +5% 24.5 2012 2016 2012 2016 2012 2016 New software licenses Recurring

  32. Slide 32: Strong Increase in Revenues Across all Market Sectors and Regions

    Strong Increase in Revenues Across all Market Sectors and Geographic Regions New systems Geographical region 113.1 260.2 6.8 15.1 11.4 85.3 +96% 198.4 68.8 6.1 12.5 +64% 5.8 50.1 42 +60% 31.3 68.9 +37% 50.2 42 +7% 44.8 93.8 +14% 107.4 2012 2016 2012 2016 Fashion and apparel Automotive Europe America

  33. Slide 33: Increased Profitability

    Increased Profitability Income from Operating Security ratio* Net income operations margin 83.9% 26.7 37.3 80.8% 14.3% +3.1pts +4.6pts 2.0x 1.9x 9.7% 19.3 13.3 2012 2016 2012 2016 2012 2016 2012 2016 Record financial results  These results demonstrates Lectra’s ability to accelerate organic growth

  34. Slide 34: A Stronger than Ever Balance Sheet

    A Stronger than Ever Balance Sheet Shareholders’ equity Net cash Working capital Nouveaux systèmes Nouveaux systèmes 132.6 75.7 2.3 -1.3 2.0x 5.3x 65 -13.4 -€9.4M 14.2 -22.8 2012 2016 2012 2016 2012 2016 Working Capital Requirement The company has no financial debt since March 2015 Working Capital R

  35. Slide 35: Share Price Multiplied by 3.8

    Share Price Multiplied by 3.8 Evolution from January 1, 2013 to December 31, 2016 (in euros, daily closing price and index) 20 Lectra: +281% 18 16 14 12 10 CAC Mid & Small: +74% 8 6 4 01/01/2013 01/01/2014 01/01/205 01/01/2016 31/12/2016 Market capitalization multiplied by 4.1, increasing from €137

  36. Slide 36: 2013-2016: Enhanced Capabilities In All Areas

    2013-2016: Enhanced Capabilities In All Areas—A Strong Foundation for Future Developments In four years, Lectra has entirely transformed  Lectra has bolstered its technological advance, enhanced the expertise of its teams and the value of its offer, notably in cutting room automation  The company

  37. Slide 37: Analyst Conference agenda

    Analyst Conference – Paris, February 10, 2017 Financial Results for Q4 2016 Financial Results for FY 2016 Assessment of the 2013–2016 Strategic Roadmap New Strategic Roadmap for 2017–2019 2017 Outlook Analyst Conference – Paris, February 10, 2017 37

  38. Slide 38: A Long-Term Vision

    A Long-Term Vision Continuing to focus on the long term, Lectra’s new 2017-2019 roadmap is the first step in the company’s development plans for the coming decade  Across the world, Lectra’s customers face fast-changing economic and societal conditions, with wide regional variations  At the same t

  39. Slide 39: Millennials Will Transform the Global Economy

    Millennials Will Transform the Global Economy Born between 1980 and 2000, Millennials represent the largest generation of working age in history  In a few years, this generation will equate to the largest number of consumers in the world  Brought up in a digital world, Millennials are shaking up r

  40. Slide 40: Digitalization Will Force Companies to Reinvent Themselves

    Digitalization Will Force Companies to Reinvent Themselves The digitalization of processes and objects, now connected, is set to have a greater impact on organizations than the Internet  It is made possible by an entire ecosystem of new technologies, from the cloud to mobility, and from augmented r

  41. Slide 41: Industry 4.0 Will Nurture New Models

    Industry 4.0 Will Nurture New Models This concept, articulated in Germany in 2010 to tackle growing competition from emerging countries, has spearheaded today’s fourth industrial revolution  Since then, many countries have launched similar initiatives to modernize industrial tools, with a view to b

  42. Slide 42: China's Evolving Economy Will Have Global Consequences

    China’s Evolving Economy Will Have Global Consequences The country is accelerating its transition towards a growth model firmly anchored in consumption, added-value and productivity  While this evolution will create new opportunities, substantial challenges for both Chinese and non- Chinese compani

  43. Slide 43: Impact of Four Major Trends Expected to Grow

    The impact of these four major trends, already perceptible, is expected to be felt with growing strength They generate many challenges for Lectra’s customers  To go on developing, to bolster their competitive position and to serve their customers and end-consumers, businesses need to accelerate the

  44. Slide 44: Industry 4.0: an Unprecedented Opportunity for Lectra

    Industry 4.0: an Unprecedented Opportunity for Lectra Calling for the integration of smart solutions and services, and the replacement of production plants incompatible with connected factories’ concepts, Industry 4.0 presents an unprecedented opportunity for Lectra  The combination of SaaS (Softwa

  45. Slide 45: 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  Lectra’s expert knowledge of customers’ business deployed by Lectra’s teams, the ability to accompany customers and their command of best practices in each industr

  46. Slide 46: Lectra Aims to Significantly Boost the Value of its Offer

    Lectra Aims to Significantly Boost the Value of its Offer Lectra will accelerate the integration of available new technologies to reinforce the company’s premium positioning and hold onto its competitive edge  Over the next three years, the company will continue to develop revolutionary new cloud s

  47. Slide 47: Developing the Business Model for Long-Term Growth

    Developing the Business Model for Long-Term Growth 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 The company will continue to focus activities on its main market

  48. Slide 48: Ambitious Strategic Objectives

    Ambitious Strategic Objectives Lectra’s five strategic objectives are  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 st

  49. Slide 49: Many Opportunities to Accelerate Growth

    Many Opportunities to Accelerate Growth In addition to Industry 4.0 and SaaS offers, Lectra is counting on five other accelerators to boost growth  China: as the country upgrades manufacturing plants and expands its domestic market, supported by the Chinese government’s strategic ‘Made in China 202

  50. Slide 50: Financial Objectives Focus on Revenue Growth and SaaS Transformation

    Financial Objectives Focus on Revenue Growth and the Transformation to a SaaS Business Model Taking into account expected macroeconomic conditions, and the impact of developments relating to Lectra’s business model over the next three years, the company has set the following financial targets for 20

  51. Slide 51: Increased Investment in Design and Development of Lectra's Offers

    Increased Investment in Design and Development of Lectra’s Offers Lectra will continue to invest actively in innovation to reinforce its competitive leadership and value proposition  R&D expenditure will progressively rise, averaging around 10% of annual revenues over the period, compared to 9.4% f

  52. Slide 52: Self-Finance Development and Pursue Dividend-Payment Policy

    Lectra Will Continue to Self-Finance its Development and Pursue its Dividend-Payment Policy The key to Lectra’s business model is the generation of a high level of free cash flow and a structurally negative working capital requirement  Thanks to this virtuous circle, the Company’s net and available

  53. Slide 53: Analyst Conference agenda

    Analyst Conference – Paris, February 10, 2017 Financial Results for Q4 2016 Financial Results for FY 2016 Assessment of the 2013–2016 Strategic Roadmap New Strategic Roadmap for 2017–2019 2017 Outlook Analyst Conference – Paris, February 10, 2017 53

  54. Slide 54: 2017 Outlook

    2017 Outlook Lectra entered 2017 with stronger operating fundamentals than ever and an even stronger balance sheet However, the year looks unpredictable once again  Persistent macroeconomic, geopolitical, political and currency uncertainties, together with increased risk, are liable to continue to

  55. Slide 55: Upcoming Financial Calendar

    Upcoming Financial Calendar Q1 2017 Financial Results April 27, 2017 Annual Shareholders’ Meeting April 28, 2017 Q2 2017 Financial Results July 27, 2017 Q3 2017 Financial Results October 30, 2017 Analyst Conference October 31, 2017 FY 2017 Financial Results February 12, 2018 Analyst Conference Febru

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