ESI Group: First-Quarter 2020 Sales
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ESI Group: First-Quarter 2020 Sales

Resiliency in a time of “business not as usual” 

PARIS — (BUSINESS WIRE) — May 12, 2020 — Regulatory News:

As a pioneer in virtual prototyping solutions and a key player in industrial digital transformation, ESI Group (Paris: ESI) empowers manufacturers to navigate increasing complexity by replacing real tests and prototypes with highly accurate, predictive and representational virtual prototypes. ESI Group’s software solutions are built from decades of expertise in physics of materials, essential to the creation of realistic virtual prototypes and to the anticipation of asset performance in-service. ESI’s customers are an enviable list of industry leaders worldwide, who benefit from enhanced innovation, competitiveness, performance and productivity thanks to ESI Group’s most innovative solutions.

ESI Group, Paris, France, (ISIN Code: FR0004110310, Symbol: ESI), today releases its sales for the first quarter of 2020 (period from January 1st to March 31st).

Cristel de Rouvray, Chief Executive Officer of ESI Group, comments:
“First quarter revenues decreased 6.1%, partly as sales adjusted to the new Fiscal Year and the timing of some important Renewals and, partly, on the impact of Covid-19 on the completion of New Business transactions. The Covid-19 crisis, impacted us first in China, and now on other territories with the following pattern: while new business conversations are delayed & adapted by confinement measures, license renewals and repeatable services are holding up strong across our four main industries creating a foundation of stability to navigate the current uncertainty. As a positive collateral, we are experiencing an acceleration of our own transformation as we adopt a more efficient global organization. Overall, we have confidence that the Group will see its value proposition even strengthened when the world adjusts with increased digital commitment to its ‘new normal’.”

Sales (€m)

 

Q1-2020

 

Q1-2019

 

 

Change

 

 

 

 

 

 

Current rate

 

Constant rate (cer)

Q1 Total

 

54.9

 

58.4

 

(6.1%)

 

(6.9%)

Q1 - Licenses

 

48.8

 

50.8

 

(4.0%)

 

(4.8%)

Q1 - Services

 

6.1

 

7.6

 

(20.3%)

 

(20.9%)

Solidity and resilience strengthened by unchanged high Licensing recurrence, New Business delays

In the first quarter of its new fiscal year (January 1, 2020 - March 31, 2020), ESI recorded sales of €54.9m, down 6.1% (-6.9% cer). Due to the recent change of fiscal year, the first quarter should now represent approximately 40% of annual revenues (vs. 20% in the old fiscal year format), allowing better fiscal year visibility.

Licensing revenues were €48.8m (-4.0%, -4.8% cer, 89% of total revenues) and Services revenues were €6.1m (-20.3%, -20.9% cer, 11% of total revenues). In the current context of the Covid-19 crisis, new business in Licenses and Services has been largely delayed, though the performance of repeat business highlights the Group’s fundamental resilience:

Robust dynamic maintained in all regions and every focus industry sector

The geographical breakdown of quarterly revenues is almost identical to that of Q1 2019: EMEA represents 58.2% (vs. 58.6%) of total revenues, ASIA represents 29.4% (vs. 29.8%) of total revenues and the Americas represent 12.4% (vs. 11.7%) of total revenues. EMEA and Asia (mostly China) were impacted during the quarter, while Americas remained stable.

The Group's four priority focus industries - Automotive & Ground Transportation, Aeronautics & Aerospace, Heavy Industry, Energy - accounted for around 90% of total orders. In Licensing activities, Automotive & Ground Transportation remained stable and the Group secured its largest annual automotive quarter despite turmoil in the sector which began even before Covid-19. Notably, in January 2020, ESI renewed its 11th three-year contract with its first customer, one of the largest automotive global OEMs.

For the three other focus industries, the revenue is more evenly distributed across the year both for renewals and new business. The situation in China more heavily impacted the performance of Aeronautics & Aerospace during this quarter.

Dealing with business “not as usual” and deploying a business continuity plan toward a “new normal”

ESI was ahead of the curve in ensuring the health and safety of colleagues, customers and partners, and swiftly introduced strict internal measures, some global like travel restrictions and work-from-home policy, so that the Group experienced no damaging interruption in operations.

In this time of business not as usual, the Group has implemented a Business Continuity Plan:

Being a few days earlier than others was critical in some places. In India for instance, where the Group has several hundred employees in spread locations, our offices were shut down 3 days prior to the governmental mandate. This timely decision helped to fully organize and equip our personnel, avoiding the rush on laptops that left many other local companies stranded.

General Assembly Meeting information

ESI Group's Annual General Meeting will be held on Thursday, June 25, 2020 at 4 pm in closed session with no physical attendance. Participation and document consulting procedures are detailed in the notice of meeting available on the company's website.
ESI Group will keep its shareholders informed of any changes in the procedures for participating and voting at the Shareholders' Meeting and, to this end, shareholders are invited to regularly consult the section dedicated to the Shareholders' Meeting on the Company's website.

Upcoming events

Annual General Meeting

June 25, 2020

             

2020 Half-Year Sales and Results

September 10, 2020

             

Q3 2020 Sales

October 27, 2020

About ESI Group
Founded in 1973, ESI Group is a leading innovator in Virtual Prototyping solutions and a global enabler of industrial transformation. Thanks to the company’s unique know-how in the physics of materials, it has developed and refined, over the last 45 years, advanced simulation capabilities. Having identified gaps in the traditional approach to Product Lifecycle Management (PLM), ESI has introduced a holistic methodology centered on industrial productivity and product performance throughout its entire lifecycle, i.e. Product Performance Lifecycle™, from engineering to manufacturing and in operation. Present in more than 40 countries, and in major industrial sectors, ESI employs 1200 high level specialists around the world and reported 2019 sales of €146 million. ESI is headquartered in France and is listed on compartment B of Euronext Paris.
For further information, go to www.esi-group.com.



Contact:

ESI - Shareholder Relations
Florence Barré
investors@esi-group.com
+33 1 49 78 28 28

SHAN - Press & Shareholder Relations
Florent Alba
ESIgroup@shan.fr