ESI Group

FY 2018 Sales: confirming the return to growth - Seite 2

The Licensing activity is the mainstay of ESI’s business model, representing 79% of annual sales at €109.8m (+3.9%). Primarily comprised of yearly licenses, which are for a large part billed at the end of the year, this business brought in €49.9m (+1.8%) for Q4, a good performance considering the early signing of the €1.7m renewal contract in the 3^rd quarter, and €70.4m for H2 (+5.6%).

The FY18 Licensing activity consists of:

i. Repeat business (€92.2m), (renewal and add-ons) representing 84% of the licensing revenues and generating significant recurring business (87.2%).

ii. New business (new customers or new solutions at existing customers) (€17.6m), representing 16% of total Licensing revenues.

The Services (Consulting) activity combines various services, from industrial and advanced application studies, to R&D projects and training. The significant upturn in business during the second half (+6.3%) at €15.7m was driven by the global momentum of some major European companies, particularly in the French automotive, aeronautics and energy industries. Overall, sales for the Services division remained steady at €29.6m (+0.1%), for a 21% share of total annual revenues.

A glance at the geographic distribution of revenue highlights the strong performance of the EMEA region, which at €68.8m accounted for 49.4% of the total, up 7.9% vs last year, and moved ahead in the mix as compared to Asia (35.7%) and the Americas (14.9%), which decreased slightly to €49.8m (-0.4%) and €20.8m (-3.3%) respectively. The global momentum is due to the strategic focus on key accounts, resulting in a +12% volume increase among the 20 largest ones, in particular driven by big contracts with the European industry: Automakers (Volkswagen Group, Renault, etc.), Energy (Framatome, EDF), Aeronautics (Safran). These global Top 20 clients represent 45% of the total amount of bookings. The Transportation (inc. Automotive) industry this year represents 57% of total sales.

2018, an ongoing transformation

A technological and digital revolution is transforming industry worldwide, opening countless new possibilities for design, manufacturing and asset management, straining the traditional ways of evaluating performance that still heavily rely on real (hardware) tests and prototypes. Companies have no choice but to digitize their product development and performance evaluation, not only for pre-certification but increasingly for the asset in-Service. This is the most critical facet of the digitization of industry (Industry 4.0, Smart Factory).