PARROT

2020 THIRD-QUARTER BUSINESS

PRESS RELEASE Paris, November 18, 2020, 8am CET

2020 THIRD-QUARTER BUSINESS

Commercial drone development strategy continuing to move forward

For the third quarter of 2020, the Parrot Group is reporting consolidated revenues of €14.3m, down 20% year-on-year and up 13% compared with the second quarter of 2020, which was most affected by the measures aimed at slowing the coronavirus pandemic. Consolidated revenues for the first nine months of 2020 totaled €40.8m, with the year-on-year contraction reduced to -29% compared with -33% at the end of the first half of 2020; this trend remains linked to the decrease in sales of consumer products and the gradual transformation of the product mix to focus on commercial drones, targeting stronger margins.

Revenues for drone data analytics and metrics software (Pix4D), with negligible impacts from the health crisis, recorded 4% year-on-year growth in the third quarter of 2020, supported by the expansion of the offering with the launch of several business solutions at the start of the year (Pix4Dreact, Pix4Dsurvey, Pix4Dinspect, etc.). This subsidiary represents 40% of the Group’s consolidated revenues and does not consume any cash.

The development of the micro-drone business (Parrot Drones) continues to reflect the repositioning around higher value-added commercial drones. The contraction in revenues is linked exclusively to the lower level of consumer drone sales, while commercial drones achieved sales growth, both in the third quarter and over nine months, driven by the ANAFI Thermal and ANAFI SE (Security Edition). Revenues also include an amount for transfer-costing R&D (€2.1m at September 30, 2020, +17% from September 30, 2019), in line with the financing of development projects for micro-drone tenders for the armed forces and law enforcement sectors launched in 2018 and 2019. Several responses are expected before the end of 2020, particularly in France with the French government defense procurement and technology agency (DGA) and in the United States for the Department of Defense’s SRR program.

With sales trends affected by the drop in business investment levels in the context of the health crisis, sales of fixed-wing commercial drones (senseFly) are close to their level from the first quarter of 2020 (Q1: €3.4m - Q2: €1.8m - Q3: €3.1m). The impact on earnings is limited thanks to strict control over costs. Agricultural sensors (MicaSense) are following the same trends.