ECA Group: guidance update

ECA Group: guidance update

In the third quarter of 2017, ECA Group stressed that decision-making with respect to several major calls for tender had been regularly postponed by the clients over the last few months. This trend continued over the last two months, in particular in the Robotics and Integrated Systems division. As a result, the pace of orders received this quarter will not allow to reach the fourth quarter's ambitious revenue target and, consequently, the Group's annual revenue target.

Friday, December 22 2017

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As a result, ECA Group has decided to intensify the measures aimed at improving its operational efficiency and reducing its costs, while maintaining its strategic direction. In particular, the Group aims to reduce its costs by €4 million per year. It also considers is considering the disposal of loss-making foreign subsidiaries that have become non-strategic and whose revenue is not material at Group level.

Within this framework, ECA Group is now expecting 2017 revenue of about €105 to €110 million (not including planned disposal), compared with 2016 revenue of €103.4 million. Although current operating profitability in the second half is expected to far exceed that of the first half, it is expected to show a significant decline over the full year. Non-cash exceptional items related in particular to the planned disposals could also affect net income.

ECA Group remains confident of its commercial outlook in the medium term. The Group is well-positioned for several calls for tender; one of them could materialize in the next few weeks. The Group is ramping up the marketing of various products and solutions that have now reached maturity and that have been put on the market in the three divisions over the last few years.