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ESI Group: First-Half 2017 ResultsRegulatory News:
Commenting on the half-year results, Alain de Rouvray, Chairman and
Chief Executive Officer of ESI (News - Alert) Group (Paris:ESI), said: "In the wake
of 2016, which featured fine performances across all indicators and the
consolidation of a number of new acquisitions, we have ramped up our
five-year strategic transformation plan - "Objective 2020" - designed to
keep pace with the economic and industrial trends of the new "Outcome
Economy". Within this context of deep transformation, our ongoing drive
to adapt our operational resources in H1 2017 took its toll on results
for the period, which also suffered from a prior-period comparable
basis. Priority was given to investments initiated in the first quarter
of the year to provide support for the launch of our disruptive 'PPL'
(Product Performance LifecycleTM) approach. The
Group's new solutions are based on the shift of Virtual Prototyping
towards a connected Hybrid Twin (News - Alert)TM; making
it possible, for example, to provide virtual support for predictive
maintenance, as well as for production control and assisted or
autonomous driving. Our solutions are tackling the key challenges of the
Industry of the Future by providing businesses with complete control
over a product's entire lifecycle, from design to ultimate withdrawal,
through manufacturing of the new product and operational maintenance of
the used product that factors in the consequences of wear and tear,
including repair of the damages sustained while in service. Consolidated half-year results Half year closed on July 31
These figures were approved by the Board of Directors' meeting held on Monday, September 18, 2017. (*) EBITDA excludes non-recurring items and includes the impacts of capitalized R&D expenditure and provisions/reversals for impairment of trade receivables. Acquisition during the period: "Scilab Enterprises" was consolidated from February 28, 2017. NB: because of strong seasonal variations, ESI Group's Licenses business recognizes a big part of its annual revenue in the 4th quarter of the year. The Group's financial year ends on January 31.
First-half 2017 sales This decrease reflects both the base effect following the exceptional performance in H1 2016, and the impact of the transformation phase on both existing and new business. The product mix remained stable year-on-year, Licenses contributed 73% of total sales, compared with 72% in the prior period. Licenses revenue declined by 2.8% year-on-year to €39.0 million. Most of this decline concerned the sale of perpetual licenses (PUL) in H1 2016 and does not reflect a recurring issue in the install base. Services revenue was down by 6.9% to €14.7 million. It should be recalled that Services grew by 15.4% in H1 2016 due to a cyclical and exceptional performance of Japan. ESI's geographic sales mix reflects a relative performance of global activity on the semester, better in Europe (up 2.8%) than in the Americas (down 2.4%) and Asia (down 10.3%).
Gross margin
Continued strategic investment in R&D
Profitability indicators impacted by investment As a result of the decline in EBITDA, the Group reported a current operating loss of €5.5 million and negative EBIT of €6.0 million, down by €3.6 million and €3.2 million, respectively, on H1 2016. The Financial Result remained stable year-on-year at negative €1.6 million and the Group's attributable let loss for the period was €5.9 million, compared to a loss of €3.5 million for prior period. It should be recalled that these financial results reflect traditionally the strong seasonality of Licensing revenue, lower on the first semester.
A robust financial structure Strategic transformation to deliver solutions for the Industry of the Future
Integration of new technologies as part of ESI's PPL approach
Strengthening our ecosystem ESI Group has also stepped up its involvement in major tech events such as CES (News - Alert) (Consumer Electronics Show) in Las Vegas, Salon du Bourget in Paris and the Simulation and High-Performance Computing Forum at Teratec (Exascale computing), the international meeting for Simulation, Big Data and Machine Learning. We have been able to use these key industry events to pave the way for new partnerships using the PPL approach and to successfully showcase the innovative solutions developed by the Group.
Acceleration of sales transformation phase The Group has also set up latest generation demo centers to showcase ESI's Immersive Virtual Engineering (IVE) solution (IC.IDO) and it has strengthened its support and marketing teams and learning centers. These are internationally available to all users of the Group's solutions. For example, the new Silicon Valley (San José, CA (News - Alert)) office hosts a development team specialized in new technologies such as Machine Learning, Artificial Intelligence, Internet of Things (IoT) and the Cloud, together with a local and regional marketing, sales and support team. Next events:
About ESI Group ESI Group is a leading innovator in Virtual Prototyping software and services. Specialist in material physics, ESI has developed a unique proficiency in helping industrial manufacturers replace physical prototypes by virtual prototypes, allowing them to virtually manufacture, assemble, test and pre-certify their future products. Coupled with the latest technologies, Virtual Prototyping is now anchored in the wider concept of the Product Performance Lifecycle, which addresses the operational performance of a product during its entire lifecycle, from launch to disposal. The creation of Hybrid Twins, leveraging simulation, physics and data analysis, enables manufacturers to deliver smarter and connected products, to predict product performance and to anticipate maintenance needs. ESI is a French company listed in compartment B of Euronext Paris. Present in more than 40 countries, and addressing every major industrial sector, ESI Group employs about 1200 high-level specialists around the world and reported annual sales of €141 million in 2016. For further information, go to www.esi-group.com. View source version on businesswire.com: http://www.businesswire.com/news/home/20170919006369/en/ |