“Very degraded environment” impacts sales at Lectra

Lectra, a major global player in the fashion, furniture and automotive markets, has reported a decline in full year sales.

According to its latest results from 31 December 2022 to 1 January 2023, total group sales declined 6% on a like-for-like basis to €477.6m from €521.9m. EBITDA was also down by 15% to €79m from €98.4m.

Lecta said that the year 2023 was marked by a “severely degraded macroeconomic and geopolitical environment”, with many companies worldwide “delaying” investment decisions.

“Against this backdrop, orders for perpetual software licenses, equipment and accompanying software, and non-recurring services (145.4 million euros) decreased by 26% while new subscriptions for software sold in Software-as-a-Service (SaaS) mode, of which the annual value amounted to 10.8 million euros, continued to grow (+15%), confirming their success and increasing adoption by Group customers,” the company said.

“The 2023 results showed a strong improvement in the fundamentals of the Group’s business model, largely due to synergies arising from the Gerber acquisition. Revenues from recurring contracts rose by 10% and the gross profit margin increased by 3.5 percentage points, on a like-for-like basis.

“Moreover, the Group decided to raise salaries, twice in 2022 and again in early 2023, in order to protect employees from inflation; it also continued to invest for the future by strengthening its R&D teams.

“These decisions raised fixed costs in the first quarter of 2023 by 11%, compared to the first quarter of 2022. Measures to reduce certain overhead costs brought the increase down to 2% in the fourth quarter, without sacrificing investments for the future.”

Looking ahead, Lectra said it has set as its objective for 2024 to achieve revenues in the range of 480 to 530 million euros (+2% to +12%) and EBITDA before non-recurring items in the range of 85 to 107 million euros (+10% to +40%).

“At this early stage of 2024, continuing low visibility regarding orders and revenues from new systems makes it impossible to predict the actual timing and scale of the future rebound in this area. On the other hand, visibility is high for recurring revenues, which accounted for 68% of total revenues in 2023 and will continue to grow in 2024.”

Earlier this year, Lectra also announced the launch of its enhanced Furniture On Demand by Lectra offering. Read more on this here.

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