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|(In € millions)||Q1 - 20201||Q1 - 2019||CHANGE|
|Structure & disposals||(0.0)||21.2||n/a|
|Backlog at end of period||515.2||129.8||+297.1%|
1 Unaudited figures
ECA Group first quarter 2020 revenue increased by 6.4% to €22.6 million. The Aerospace and Robotics divisions were impacted by the Covid-19 crisis from mid-March, otherwise the Group’s performance would have been even better.
As at 31 March 2020, the Group’s backlog was at a high level of €515.2 million. The level of orders taken in the first quarter was down significantly, continuing the trend observed at the end of the 2019 financial year. Adversely affected by postponed orders, it does not reflect the Group’s solid commercial outlook.
In the Robotics division, revenue grew by 12.8% to €15.6 million for first quarter 2020. The division benefits from the high order backlog, and notably the execution of the sea mine hunting project for the Belgian and Dutch navies that continued during the quarter.
The division’s backlog was €494.9 million at 31 March 2020, compared to €98.5 million on the same date a year ago.
In the Aerospace division, revenue declined by 5.3% during first quarter 2020, to €7 million. The health crisis led to a strong reduction in activity in March with a decrease in first quarter revenue of varying proportions but across all areas of activity for aeronautics customers.
The division’s backlog was €20.3 million at 31 March 2020, compared to €31.2 million at 31 March 2019.
Since the beginning of the crisis, ECA Group has implemented a global adaptation plan to protect the health of its employees and to preserve, as far as possible, the activities that are essential for its customers and its cash-in-hand.
Activities have been rapidly adapted within the sites to protect employee health, notably through the use of remote working whenever possible, and a business continuity plan has been implemented.
The Group has set up a cost readjustment plan, with the implementation of partial or total reductions in activity for almost 50% of its workforce, particularly in the Aerospace division which has been more affected by the crisis. At the same time, ECA Group will request a guaranteed loan from the French State to fully safeguard its liquidity whilst preserving its confirmed credit lines.
In this context, the Board of Directors has decided not to propose the 25% increase in the dividend per share and, as a result, has amended the draft resolution that will be submitted to the Shareholders’ General Meeting of 5 June 2020, reducing the dividend per share from €0.50 to €0.40, identical to that paid in 2019.
The crisis will have consequences on the Group’s performance in 2020, particularly during the second quarter. The most badly affected area of the business will be the Aerospace division in which, faced with the collapse of global air traffic, the major customers have decided to suspend or significantly reduce the production of commercial aircraft. The Group has been implementing a plan to capture commercial and technological synergies between its divisions since 2018. The plan will now be accelerated given the market changes.
ECA Group’s outlook remains solid. The Group has an excellent backlog of over four years of revenue and is positioned in markets, particularly that of defence, which should be preserved over the short and medium term.