· Revenues: €175.7 million (+14%)
· Income from operations: €23 million (+73%)
· Net income: €16 million (+66%)
· Free cash flow: €14.8 million
· Net cash: €52 million
Lectra’s Board of Directors, chaired by André Harari, reviewed the unaudited consolidated financial statements for the third quarter and first nine months of 2015.
(Unless stated otherwise, changes are at actual exchange rates).
Q3 2015: A More Difficult than Expected Macroeconomic Context
Since July 1, the macroeconomic context has continued to deteriorate, mainly due to the Chinese economy’s confirmed slowdown and its repercussions on all Asian countries, which are very dependent upon China, and to Brazil’s and Turkey’s further downturn. In general, the business environment worldwide is less favorable. Customers within Lectra’s market sectors have consequently decreased their investment levels due to a lack of visibility and increasing concerns.
In this context, orders for new systems (€22.9 million) were down 3% (–9% like-for-like) compared with Q3 2014.
Revenues and Income from Operations Up Sharply
Revenues (€59.3 million) were up 10% (+4% like-for-like).
Income from operations (€9.8 million) increased by 33% (+8% like-for-like). Net income (€7 million) was up +35%.
Free cash flow was €10.8 million. This includes the receipt of €4.8 million relating to the 2011 French research tax credit.
First Nine Months of 2015: Income from Operations Ahead of The Company’s Roadmap at Actual Exchange Rates, but Lagging Behind Like-for-Like
The roadmap corresponding to the company’s annual objective communicated on February 11, 2015 anticipated first nine month revenues of €176.8 million and income from operations of €20.4 million (based on exchange rates used in setting them, notably $1.25/€1).
At actual exchange rates, revenues (€175.7 million) were thus almost in line with the roadmap and income from operations (€23 million) were ahead by €2.6 million. At the exchange rates used when setting the 2015 objectives, revenues and income from operations were lagging behind the roadmap €9.6 million (–5%) and €1.9 million (–9%) respectively.
Positive Impact from Weaker Euro
The US dollar was up 22% compared with the first nine months of 2014; the yuan appreciated 20%.
Exchange rate variations have mechanically had a major impact, boosting revenues by €13.2 million (+8%) and income from operations by €7.1 million (+44%) for the first nine months at actual exchange rates compared with like-for-like figures.
The sharp fall in the euro since summer 2014 has been a major event for the company. Lectra has significantly bolstered its competitive position worldwide.
Given the complex effects produced by such sharp fluctuations in currency parities, like-for-like comparisons become decreasingly relevant.
Orders for New Systems Below Company Expectations
Orders for new systems (€70.3 million) increased 4% compared with the first nine months of 2014. Like-for- like, they were down 4% and remained significantly below company expectations of a rise of above 15%.
Orders for new software licenses (€17.1 million) were up 5%, and CAD/CAM equipment (€42.5 million) by 6%. Training and consulting (€9.2 million) were down 4%, in the absence of significant new projects signed in the first half. Geographically, the situation is highly contrasted: orders in the Americas increased by 33% (+44% in North America and +5% in South America), but were down 3% in Europe and 6% in Asia-Pacific; they increased by 5% in the rest of the world.
Very Strong Earnings Growth
Revenues (€175.7 million) were up 14% (+6% like-for-like). Revenues from new systems sales (€73.3 million) increased by 15%, recurring revenues (€102.4 million) by 14% (+5% and +6% like-for-like, respectively).
Income from operations (€23 million) increased by 73% (+20% like-for-like) and the operating margin (13.1%) up 4.5 percentage points (+1.2 percentage points like-for-like).
Net income reached €16 million, up 66%, and free cash flow €14.8 million.
