COMPANY BACKGROUND & STRATEGY - March 2022 - Lectra
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COMPANY BACKGROUND & STRATEGY
March 2022
Lectra company background & strategy
n Who is Lectra?
n Lectra 4.0 strategy
n Strategic roadmap for 2020-2022
n 2022 outlook
n Appendices
− 2021 results
− Product portfolio
2 Lectra - Company background & strategy
Who is Lectra?
More than 40 years of innovation and challenges
“LECTEUR” that can read
Lectra has consistently demonstrated its resilience
“TRACEUR” that can draw
Lectra 1.0 Lectra 2.0 Lectra 3.0 Lectra 4.0
1973 1991 2010-2011 2017
Company founded After the company’s serious Lectra proves its resilience after the The launch of Lectra’s
financial crisis of 1990, André global economic crisis. Very strong Industry 4.0 vision and strategy
1976: First computer-aided design Harari and Daniel Harari recapitalize rebound in sales activity. Record
(CAD) systems sold. André Harari Lectra and take over its income and free cash flow. Lectra 2018: Lectra acquires Kubix Lab.
becomes a shareholder and helps management increases its leadership in Launch of new Industry 4.0 compliant
Lectra’s two founders to develop their automotive offers
business plan 1991-1996: Strategic redeployment plan:
extensive R&D program, overhaul of the 2012: Renewal of the entire technology 2019: Lectra acquires Retviews.
1985: Lectra becomes world leader company’s entire product range, new offer for fabric and leather cutting. Global roll out of the offers for the
in CAD solutions for the fashion and market sectors, new business model New versions of Lectra’s main software Industry 4.0.
apparel industry and expands into Far-reaching 4-year company Record levels of recurring revenues
computer-aided manufacturing (CAM) 2000 : Lectra becomes number one transformation plan and €50 million and free cash flow
worldwide investments for the future
2021: Lectra acquires Gerber
1987: Initial public offering 2004: Lectra acquires Investronica, Technology to create a world-class
Lacent and Humantec 2013-2016: The strategic roadmap leader within Industry 4.0 for the fashion,
and transformation plan reach their automotive and furniture markets
2008-2009: Lectra is severely affected by objectives. Commercial success for
the consequences of the worldwide crisis Lectra’s new generation of laser-cutting Lectra acquires Neteven and Gemini
on its markets. Reduction of overhead solutions for airbags CAD Systems (Gemini)
costs, safeguarding the company’s core
assets. Steadfast investments in R&D
3 Lectra - Company background & strategy
Lectra - Company background & strategy
Who is Lectra?
Serving world-class customers in different market segments
Fashion Automotive Furniture Other Industries
52%* 21%* 14 %* 13%*
§ Brands § Fabric car seat and interiors § Residential § Sign & graphics
§ Manufacturers § Leather car seats and interiors § Outdoors § Aeronautic
§ Retailers § Airbags § Contract (Hospitality, offices, etc.). § Marine
§ Hybrid Manufacturers
*2021 pro forma revenues from perpetual software licenses, equipment and accompanying software, and nonrecurring services (if Lectra
5 Lectra - Company background & strategy had completed the acquisitions of Gerber, Neteven and Gemini on January 1, 2021)
Who is Lectra?
A unique worldwide presence
€468 MILLION €73 MILLION
2021 pro forma revenues* 2021 pro forma EBITDA before non-recurring items*
59% of which comes from recurring revenues* | > ≈ 95% of revenues* is generated outside of France
Presence in +100
% of 2021 pro forma revenues*
countries reached by a global
network of subsidiaries, agents
Americas 34% and distributors
Europe 32% 7 international call centers
Asia Pacific 27% 6 international advanced
technology centers in Atlanta,
Other countries 6%
Bordeaux-Cestas, Milan,
Shanghai, innovation center in
New-York and innovation lab in
Bordeaux-Cestas
2,400 employees
*2021 pro forma figures (if Lectra had completed the acquisitions of Gerber, Neteven and Gemini on January 1, 2021)
6 Lectra - Company background & strategy
Who is Lectra?
Innovation at the service of excellence
Innovation is an integral part of Lectra’s
genetic code
€51 million
2021 pro forma investments in R&D*
11%
of 2021 pro forma revenues*
IOT
An unmatched investment in innovation to go beyond state of the art and unlock quicker all the potential of Industry 4.0.
*2021 pro forma figures (if Lectra had completed the acquisitions of Gerber, Neteven and Gemini on January 1, 2021)
7 Lectra - Company background & strategy
Who is Lectra?
A solid proven business model
The three pillars of Lectra’s business model Breakdown of 2021 revenues*
Software maintenance Perpetual software licenses
1
The distribution of business activity over market contracts
sectors and geographical markets with cycles that
4%
are different from each other, and the very large 11%
number of customers throughout the world. Software subscriptions
3%
Equipment and
accompanying
Software
Equipment and
⋍ 30%
33% software
accompanying software 18%
2
A balanced revenue mix between revenues from maintenance contracts
software licenses, equipment and non recurring
services and recurring revenues.
3% Training &
1%
consulting services
3
27%
Miscellaneous
The generation of significant annual free cash flow.
Consumables and parts
1Perpetual software licenses, equipment and
accompanying software, and non-recurring services
*2021 pro forma revenues (if Lectra had completed the acquisitions of Gerber, Neteven and Gemini on January 1, 2021)
8 Lectra - Company background & strategy
Lectra company background & strategy
n Who is Lectra?
n Lectra 4.0 strategy
n Strategic roadmap for 2020-2022
n 2022 outlook
n Appendices
− 2021 results
− Product portfolio
9 Lectra - Company background & strategy
Lectra 4.0 strategy
A long-term vision
Continuing its focus on the long-term, the Lectra
4.0 strategy, launched in 2017, aims to position
Lectra as a key Industry 4.0 player in its market
sectors between now and 2030.
10 Lectra - Company background & strategyLectra 4.0 strategy
Lectra’s markets are undergoing profound changes
Fashion Automotive Furniture
Fashion brands and manufacturers Automotive suppliers, under pressure Furniture industry players are forced to
must rethink the in-store and digital from carmakers and faced with difficult adapt without delay to the demands of
experience, be always more creative, market conditions, must also reinvent younger generations yearning for
shorten time-to-market, demonstrate themselves to maintain their margins, configurable and personalized
their eco-responsibility while also while laying the groundwork for car furniture, changing lifestyles, and the
reducing inventories, markdowns, and interiors of the future. challenges of digital technology.
unsold stock.
11 Lectra - Company background & strategyLectra 4.0 strategy
Industry 4.0 is transforming industrial processes
Factories are at the heart
of the value chain
driving a new digitalized product lifecycle that will
benefit consumers
Cloud, big data, Internet of Things,
Mechanization, steam, Mass production, Electronic, IT systems, artificial intelligence…
water power electricity automation
End of the 18th century Start of the 20th century The early 1970s Today
INDUSTRY 1.0 INDUSTRY 2.0 INDUSTRY 3.0 INDUSTRY 4.0
12 Lectra - Company background & strategyLectra 4.0 strategy
Six key steps to exploit the full potential of the Industry 4.0
How can an autonomous response be achieved?
Self-optimising
What will happen?
Being prepared
Why is it happening?
Value
Understanding
What is happening?
Source: FIR e. V. at RWTH Aachen University
Seeing
PREDICTIVE
COMPUTERIZATION CONNECTIVITY VISIBILITY TRANSPARENCY CAPACITY ADAPTABILITY
1 2 3 4 5 6
DIGITALIZATION INDUSTRY 4.0
13 Lectra - Company background & strategyLectra 4.0 strategy
Lectra 4.0: a strategy to address the challenges of the Industry 4.0
Premium positioning Focus on three strategic Customers at the New 4.0 services
market sectors heart of the activities
High value-added solutions Fashion, automotive, and A commitment from Lectra teams Gradually launched on the
and services with strong furniture, with a specific approach to do everything in their power to market, they will combine data
business-line expertise. for each in terms of offers, enable customers to make analysis, Lectra's expertise and
organization and processes. optimal use of its solutions. artificial intelligence, to enable
customers to continuously
improve their operations.
14 Lectra - Company background & strategyLectra 4.0 strategy
Lectra already has the fundamentals necessary for Industry 4.0
15 years of experience Combination of equipment, Strong business-line
in IoT software, data and services expertise
7,000+ cutting machines, equipped with The sole player in its industry to integrate the 550 consultants and solution experts
censors and capable 4 key technologies of Industry 4.0 (cloud, big accompany customers on a daily basis
of being connected to the Internet, data, IoT, AI) in its products and services and will be by their side during their
are compatible with the new offers offers. transformation towards Industry 4.0.
for Industry 4.0.
Prestigious Global presence with Strong technological Virtuous business model and
customer base a network of 61 subsidiaries leadership strong financial position
15 Lectra - Company background & strategyLectra company background & strategy
n Who is Lectra?
n Lectra 4.0 strategy
n Strategic roadmap for 2020-2022
n 2022 outlook
n Appendices
− 2021 results
− Product portfolio
16 Lectra - Company background & strategyStrategic roadmap for 2020-2022
Acceleration towards Industry 4.0
The objective of Lectra Five strategic priorities
through its 2020-2022
strategic roadmap is to
capture the full potential of its
new offers for Industry 4.0,
1 Accelerate
organic growth
2 Strengthen
customer relations
while delivering sustainable,
profitable business growth.
3 Extend the offers
for Industry 4.0
4 Develop new areas
for growth
5 Capture all synergies arising
from the acquisition of
Gerber Technology*
17 Lectra - Company background & strategy * Fifth strategic priorities added on February 10, 2021, following the announcement of the Gerber Technology acquisition project.Strategic roadmap for 2020-2022
Transform internal processes to support the rollout of SaaS offers
Perpetual license SaaS
Long and complex “project” selling “Progressive” selling
Reactive relationship
limited interactions with users
VS Proactive relationship
individual monitoring of usage
Lack of visibility Measured and shared success
on the usage and on achieved results
Mastering the management of recurring revenues
By leveraging Capacity to sell services since the 1990s
existing foundations 7 Call Centers worldwide
Experts in software, cloud and data
First developments in the cloud at the beginning of 2015
18 Lectra - Company background & strategyStrategic roadmap for 2020-2022
Acceleration of the adoption of the offers for Industry 4.0 and of
the transformation towards SaaS
Number of customers using one or several offers for the Industry 4.0
500
+350
+146
270
+96
28 124
31/12/18 31/12/19 31/12/20 31/12/21
In addition to a further 120 Neteven customers
New software subscription orders Revenues from software subscriptions
Annual value, in millions of euros In millions of euros
6.1 ns 0.2% 0.6% 1.6% 2.7% 2.8%
19
13.2
2.9
1.9 7.5
0.2 0.9 0.1 0.5 1.6 3.7
2017 2018 2019 2020 2021 Lectra
2021 2017 2018 2019 2020 2021 Lectra 2021
2021 2021pro 2022
2020 scope
Lectra 2020 Lectra 2020 pro
2020 scope forma objective
forma
scope scope (including
(including2021
2021
Acquisitions)
Acquisitions)
= In % of revenues
19 Lectra - Company background & strategyStrategic roadmap for 2020-2022
Pursuit of the deployment of Customer Success
Objective: optimize customers' performance through the use of Lectra solutions.
Professional Customer Success Customer Care
Services
n
n
Expertise
Training & consulting
+ n
n
n
Proactive
Increased product value
for the customer
Long term perspective
+ n
n
n
Reactive
Solve problems
Short term perspective
Deployment of Customer Success teams was accelerated to further strengthen
relationships with its customers.
The deployment, which started at the beginning of 2020 in Italy, France and the
United States, is continuing at a rapid pace in the rest of the world:
• 720 people, of which 20 Customer Success Managers dedicated to the
offers for Industry 4.0.
20 Lectra - Company background & strategyStrategic roadmap for 2020-2022
After the acquisitions done in 2021, not one competitor has such
a capacity to innovate
R&D teams
at 30/12/2021
51 478
* 14
68
345
2020 scope 2021 scope
* To which is added close to 50 outside R&D subcontractors.
21 Lectra - Company background & strategyStrategic roadmap for 2020-2022
Intensify targeted acquisitions
Objectives of external growth
Complete range of Incorporate
Increase market share
products technological “brick”
Lectra mainly targets companies whose value is
between €10m and €60m
22 Lectra - Company background & strategyLectra company background & strategy
n Who is Lectra?
n Lectra 4.0 strategy
n Strategic roadmap for 2020-2022
n 2022 outlook
n Appendices
− 2021 results
− Product portfolio
23 Lectra - Company background & strategy2022 outlook
2022: Financial objectives
On February 8, 2021, Lectra reported on the 2022 financial objectives: returning to the level of combined revenue achieved by Lectra
and Gerber in 2019 (€482m), and generating an EBITDA margin before non-recurring items in the range of 17% to 20%.
Lectra subsequently acquired Neteven and Gemini, the rebound in activity in 2021 was greater than the Group expected and the
dollar strengthened against the euro.
In millions of euros
Revenues EBIDTA before non-recurring items
508-556 92-104
(+31% à 43%) (+41% à 60%)
482 482 96
468
82
401 73
50
20191 20201 2021 2022 2022 20201 2021 2022 2022
pro forma2 reported on pro forma2 reported on
8/2/21
objective objective
8/2/21
1 Lectra 2020 scope and Gerber Technology Change at actual exchange rates vs. 2021 actual
2
24 Lectra - Financial results Q4 & FY 2021 Including 2021 AcquisitionsLectra company background & strategy
APPENDICES
§ 2021 results
§ Product portfolio
25 Lectra - Company background & strategy2021 results
Very strong growth in
revenues and
Acquisitions of
EBITDA before non- Confirmed success of
Gerber Technology,
recurring items, on new offers for
Neteven and
account of the Industry 4.0
Gemini CAD Systems
rebound in activity
and external growth
26 Lectra - Company background & strategy2021 results
Very strong increase in revenues and earnings thanks to the rebound in activity and
the acquisition of Gerber Technology
In millions of euros
Revenues EBITDA before non-recurring items
At actual exchange rates At actual exchange rates
+64% +74%
108.5 387.6
13.5 65.1
14.1 51.6
42.9 279.1
236.2
37.5
15.9% 18.5% 16.8%
2020 actual Organic 2021 2021 2021 2020 actual Organic 2021 2021 2021
growth Lectra 2020 Acquisitions Lectra 2021 growth Lectra 2020 Acquisitions Lectra 2021
scope scope scope scope
= In % of revenues
27 Lectra - Company background & strategy2021 results
Earnings at the high end of the revised financial objectives range of July 29, 2021
In millions of euros
Lectra, after the integration of
Lectra 2020 scope Gerber, scope
(excluding Neteven and Gemini)
Scenario of Scenario of Actual Scenario of Actual
February 9, 2021 July 29, 2021 July 29, 2021
€250m to €268m €269m to €281m €279m €364m to €390m €386m
Revenues +9% to +17% +16% to +21% +19% Revenues +54% to +65% +63%
Income from €27m to €34m €35m to €40m €40m EBITDA before €54m to €64m €65m
operations before +27% to +60% +51% to +77% +61% +44% to +71% +73%
non-recurring items
non-recurring items
Like-for-like At actual exchange rates
Neteven and Gemini have contributed €1.4m and €0.5m to revenues, respectively.
Neteven's and Gemini’s contribution to EBITDA before non-recurring items was €0.2m
overall.
= In % of revenues
28 Lectra - Company background & strategy2021 results
Free cash flow much higher than net income
In millions of euros
47.5
Free cash flow before non-recurring items was 1.5x higher
than the net income before non-recurring items.
32.7 After disbursement of €8.0m in respect of fees and other
related expenses in connection with the acquisition of
Gerber, 2021 free cash-flow amounted to €39.5m,
€11.3m higher than actual net income (€28.2m).
2021
Net income 1
Free cash flow before non-recurring items
1 Before non-recurring items.
29 Lectra - Company background & strategy2021 results
Balance sheet that remains particularly robust, after the acquisitions of 2021
In millions of euros
Cash Shareholders’ equity
The increase in consolidated shareholders’ equity is explained mainly by the
€165.3m increase in capital carried out for the purpose of the acquisition of Gerber.
134.6 130.6 134.6
400.8
The Group took out a €140m loan to finance the cash portion of the acquisition price
of Gerber in the amount of €175m.
The dividend in respect of FY 2020 (€7.8m) was paid on May 7, 2021.
192.2 The acquisitions of Neteven (€12.4m) and Gemini (€7.6m) were financed by using
the available cash.
31/12/20 31/12/21
-8.8
31/12/20 31/12/21
Available cash
31/12/20 31/12/21
Net cash (+) / Net debt (-)
30 Lectra - Company background & strategy2021 results
Very strong growth in EBITDA on account of both organic growth and
acquisitions
Evolution of EBIDTA before non-recurring items
In millions of euros
+2.4
+4.3
+5.8 +13.5 65.1
-0.8
+19.6
53.1 51.6
-15.6 -1.5
37.5
2020 EBITDA Increase in Increase in Increase in Decrease in Impact of gross Increase in 2021 EBITDA Impact of 2021 EBITDA 2021 2021 EBITDA
before non-recurring revenues from revenues from fixed profit margins variable before currency before Acquisitions before
non-recurring revenues1 consumables recurring overhead overhead costs non-recurring fluctuations non-recurring non-recurring
items and parts contracts costs items at items items
Lectra 2020 constant Lectra 2020 Lectra 2021
scope exchange rates scope scope
Lectra 2020
scope
1 Revenues from software licenses, equipment and accompanying software, and non-recurring services
31 Lectra - Company background & strategyLectra company background & strategy
APPENDICES
§ 2021 results
§ Product portfolio
32 Lectra - Company background & strategyProduct portfolio Fashion Automotive Furniture
Lectra’s offer at the leading-edge of technology
Equipment and
Software sold in perpetual licenses Software sold in SaaS mode
accompanying software
33 Lectra - Company background & strategy Excluding Gerber Technology and Gemini CAD SystemsThank you!
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