35 per cent more turnover and over 50 per cent higher net profit

Last week, Lectra’s Board of Directors, chaired by Daniel Harari, reviewed the consolidated financial statements for the 2022 financial year. The corresponding report will be published at the end of the Board meeting on 23 February 2023.

In the difficult environment with the Russia-Ukraine war and its repercussions, the ongoing Corona restrictions in the important export market of China and exchange rate fluctuations, the Lectra Group performed well.

Turnover in 2022 was 521.9 million euros and EBITDA before non-recurring items was 98.4 million euros – both in line with the targets published in February 2022, which were clarified in July and confirmed in October.

Turnover increased by 35 per cent and EBITDA before one-offs by 51 per cent compared to the financial statements published in 2021. The EBITDA margin before one-off items was 18.8 per cent. Profit from operations before one-off items, at 68.5 million euros, increased by 54 per cent. This includes a charge of 11.8 million euros for the amortisation of intangible assets resulting from the acquisitions of Gerber, Neteven, Gemini and the Glengo Teknoloji activity. After taking into account a one-off charge of 4.0 million euros in 2022, the operating result was 64.5 million euros.

Net profit at €43.8 million increased by 55 per cent. Free cash flow before one-offs at 43.7 million euros was slightly down compared to 2021 due to a temporary increase in working capital requirements.

On 8 December 2022, Lectra announced the signing of an agreement to acquire the majority of the capital and voting rights of the Dutch company Textilegenesis – the transaction was completed on 9 January 2023.

At 31 December 2022, the Group had a particularly robust balance sheet, with consolidated equity of €452.2 million (€400.8 million at 31 December 2021) and a positive net cash position of €11.4 million, less than two years after the acquisition of Gerber. Working capital requirements were negative at 6.3 million euros.

The Board of Directors will propose to the Shareholders’ Meeting on 28 April 2023 to distribute a dividend of 0.48 euros per share for the 2022 financial year.

A new strategic roadmap for 2023 to 2025: Launched in 2017, the Lectra 4.0 strategy aims to position Lectra as the most significant player in Industry 4.0 in its three strategic market areas of fashion, automotive and furniture by 2030. The strategy has so far been implemented through two strategic roadmaps covering the periods 2017 to 2019 and 2020 to 2022. This will continue with a new strategic roadmap for 2023 to 2025.

The Group intends to take full advantage of its changed scale – especially after the acquisition of Gerber in June 2021 – to accelerate growth, significantly increase the share of “Software as a Service” (SaaS) in revenue and take advantage of acquisition opportunities. With employee engagement and customer recognition, Lectra aims to lead the way in building a more sustainable future.

To achieve these goals, the Group has identified six priorities until 2025:

– Strengthening the implementation of ethical, social, societal and environmental best practices both internally and towards customers.

– Exploit all synergies arising from the acquisition of Gerber

– Accelerate the transformation of software sales to the SaaS model

– Accelerate the transformation of the Group’s customer relationship and retention model

– Continuation of external growth following the two previous roadmaps;

– Preparing Lectra for the period 2026 to 2030.

These six strategic priorities provide the Group with a structure for the work required to achieve the ambitious goals of its strategic roadmap. They are explained in detail in the Financial Report on Operations and the Consolidated Financial Statements for the fourth quarter and the 2022 financial year.

Lectra aims to achieve revenues of over €700 million (including 10% SaaS revenues) in 2025, combining both organic growth and acquisitions and an EBITDA margin before one-offs of over 20%. These targets have been set based on the exchange rates prevailing on 30 December 2022, specifically US$1.07 per euro.

The Company intends to maintain its attractive payout policy to shareholders, with dividends expected to represent a payout ratio of approximately 40 per cent of net profit excluding non-recurring items over the roadmap period.

Free cash flow generation will also help fund the Group’s internal development strategy and acquisitions, as well as repay debt.

Outlook for 2023: Despite the continued uncertainty for 2023, Lectra, which has a particularly strong balance sheet and a proven business model with a very high proportion of recurring revenue, will continue to invest to prioritise medium-term growth.

Due to the exceptionally high order backlog at 1 January 2022 (€4.3 million higher than the order backlog at 1 January 2023) and the very high number of orders booked in January 2022, i.e. before the start of the war in Ukraine, revenue for the first quarter of 2023 is expected to be slightly lower than in the first quarter of 2022. Combined with the increase in overheads, this decrease is also expected to lead to a decrease in EBIDTA before one-offs.

Lectra projects 2023 sales between €522 million and €576 million (+2% to +12% at constant exchange rates compared to 2022) and EBITDA before non-recurring items between €90 million and €113 million (-5% to +20% at constant exchange rates compared to 2022).