Parrot: 2020 FIRST-HALF EARNINGS
| |
PRESS RELEASEParis, July 31, 2020, 7am CET |
2020 FIRST-HALF
EARNINGS
- Impact of the health crisis on sales trends and
earnings
- Continuity of operations and roadmap respected despite
the pandemic
- ANAFI USA launched in June: extremely high-performance
and secure drone designed in France and built in the
US
- Continued progress to further strengthen the strategy
for professionals, businesses and institutions
2020 first-half business
Business for the first half of 2020 was marked
by the context of the health and economic crisis spreading around
the world and a roadmap designed to support sales development over
the second half of the year. These factors are reflected in
consolidated revenues of €26.5m, down 33% from the first half of
2019 (-23% in Q1 2020, -42% in Q2 2020), with a marked contraction
in sales from mid-March linked to the closure of non-essential
stores and the transport restrictions. The slowdown in commercial
activity primarily concerns hardware (drones and sensors), while
software sales - which are fully online - have been more
resilient.
From the start of March 2020, all of the Group’s
business units rolled out various health measures and set up the
majority of staff to work from home, with all the infrastructures
and systems in place, ensuring the continuity of operations, while
protecting the teams. Furlough measures were introduced from April
focused on support staff and have not affected research and
development capabilities. The Group has not experienced any
difficulties with access to components or production, and has been
able to adapt to the restrictions on movement. At end-July, the
Group is still widely encouraging staff to work from home and its
teams remain firmly focused on implementing the roadmap in terms of
R&D, as well as commercial operations and development in the
Defense and Security sector.
During this period, Parrot notably continued to
professionalize its ANAFI offering, launching the ANAFI USA at the
start of June1. This new drone, offering a combination of advanced
features and sensors, is built to meet the demands of first
responders, firefighters, search-and-rescue teams, security
agencies, construction and inspection professionals. Developed in
France and built in the US, it is aligned with the highest security
and traceability standards and offers a high-performance, reliable
and highly secure solution for diverse market operators
(institutions, businesses, pro pilots).
Alongside this, the Group is moving forward with
its efforts to provide solutions (drones and software) for armed
forces and security services (police, fire services, etc.). For the
SRR program with the United States Department of Defense, which
Parrot Drones has been working on for the past 15 months, the
results initially expected for this summer could be put back to the
autumn.
The extension of the range of commercial
products and solutions is being supported by a dedicated strategy
to meet the specific needs of these clients and a growing number of
initiatives to facilitate drone integration within software and
services used by these professionals. The SDK (Software Development
Kit) Program, launched in 2019 to create an ecosystem of
professional applications, is leading to the first technological
and commercial partnerships with major market operators specialized
in airspace management or drone fleet deployment for businesses,
such as Kittyhawk, Skyward and Dronesense. Pix4D’s software
solutions are tailored to the specific demands of the core target
industries (agriculture, inspection, security and defense) and
further strengthened to meet the needs of large businesses
(Pix4Dengine, Pix4DCloud). These advances are also enabling the
Group to take part in a growing number of calls for tenders, as
well as working groups looking at changes to the regulatory
framework.
2020 first-half earnings
|
€m and % of revenues |
|
H1 2020 |
H1 2019 |
Change |
|
Revenues |
|
26.5 |
39.7 |
-33% |
|
- Of which, Parrot Drones |
|
8.1 |
16.6 |
-51% |
|
- Of which, Pix4D |
|
10.8 |
10.7 |
+1% |
|
- Of which, senseFly |
|
5.3 |
8.1 |
-35% |
|
- Of which, Micasense |
|
2.8 |
4.3 |
-35% |
|
- Of which, Airinov (1) |
|
-- |
0.7 |
-- |
|
Gross margin |
|
19.3 |
25.2 |
-23% |
|
% of revenues |
|
72.8% |
63.6% |
|
|
Income from ordinary operations |
|
-20.9 |
-13.0 |
-61% |
|
% of revenues |
|
-78.9% |
-32.7% |
|
|
EBIT |
|
-20.9 |
-13.2 |
-58% |
|
% of revenues |
|
-79.1% |
-33.2% |
|
|
Net income (Group share) |
|
-22.1 |
-13.8 |
-60% |
|
% of revenues |
|
83.6% |
-34.9% |
|
(1) Subsidiary closed in 2019.
For the first half of 2020, the gross
margin represents 73% of revenues (versus 64% in H1 2019),
linked to the ramping up of the dedicated offers and solutions for
professionals and the continued reduction in consumer product
sales.
Current operating expenditure
came to €40.1m for the first half of this year, compared with
€38.3m for the same period in 2019, with this increase allocated
almost exclusively to R&D (launch of ANAFI USA, Pix4Dreact and
Pix4DSurvey) and the ongoing innovation strategy. The change in
other cost items reflects a lower level of sales and marketing
costs (-21%) and production costs (-12%) linked to the health
measures and the product portfolio’s realignment around
professional targets. In the current context, the Group is
maintaining strict control over costs and is activating support
measures locally (furlough and payment holidays in France, furlough
and government-backed loans in Switzerland and Germany), for a
total amount (savings / assistance and in a smaller portion payment
delays) of around €2.3m for the first half of this year, taking
into account the maintenance of operations for the Group’s various
business units. At June 30, 2020, the Group's
workforce (permanent and fixed-term contracts)
represented 539 people (545 at December 31, 2019), in addition to
79 external contractors (75 at December 31, 2019).
After -€0.5m of financial income and expenses
and a -€0.4m share of income from associates, consolidated
net income (Group share) represents -€22.1m, compared with
-€13.8m for the first half of 2019.
Changes in the cash position and balance
sheet at June 30, 2020
At June 30, 2020, net cash represents
€105.1m.
Taking into account EBITDA of -€21.2m (versus
-€17.3 in H1 2019), net cash consumption for the first half of the
year came to €19.8m, with a +€1.0m change in working capital
requirements. It reflects a slight increase in inventories (+5%)
and a significant reduction in trade receivables (-39%) and trade
payables (-28%) in relation with the slowdown of sales and
purchases.
Outlook for 2020
In 2019, the Group turned its situation around
and freed up additional flexibility to continue moving forward with
its strategy for innovation and expansion on its key markets: 3D
Mapping, Geomatics, Inspection, Precision Farming and Security.
In 2020, on a market for commercial drones and
solutions whose short-term development is still difficult to
estimate, the Group notably expects to make progress with its
projects in the Defense and Security sector, while continuing to
roll out a sales strategy targeting professionals, businesses, key
accounts and governments.
With regard to the coronavirus crisis, the Group
has not at this stage encountered any significant issues in terms
of sourcing supplies, production or operations. The majority of the
Group’s employees are still working remotely, where possible with
all the systems infrastructures in place, ensuring the continuity
of the business, while protecting the teams. The Group remains
focused on moving forward with its projects in 2020 and vigilant
concerning the potential impact of the health measures on their
finalization.
The Group does not expect activity to pick up
again over the second half of the year, as certain markets,
including the agricultural sector, benefit from stronger
seasonality at the start of the year. Now positioned on commercial
applications, the Group’s sales are still dependent on clients’
investment decisions and the activity of its distribution
networks.
The Parrot Group has €105.1m of net cash at June
30 and it has further strengthened its budgetary discipline to
adapt to the current situation. In an uncertain economic
environment, this financing capacity will enable the Group to
continue developing its positions on professional markets.
Next financial date
- 2020 third-quarter revenues: November 18, 2020, before start of
trading.
ABOUT
PARROT
Founded in 1994 by Henri Seydoux, Parrot is
today the leading European group in the fast-growing industry of
drones. Visionary, at the forefront of innovation, Parrot is
positioned across the entire value chain, from equipment to
services and software. Its micro-drones, well known for their high
performance and ease of use, address the needs of consumers as well
as professionals. The Group also has a portfolio of outstanding
companies and interests in commercial drones, covering equipment,
software and services. Its expert capabilities are focused
primarily on three vertical markets: (i) Agriculture, (ii) 3D
Mapping, Surveying and Inspection, and (iii) Defense and
Security.
The Parrot Group designs and engineers its
products in Europe, mainly in France and Switzerland. It currently
employs over 500 people worldwide and makes the majority of its
sales outside of France. Parrot, headquartered in Paris, has been
listed since 2006 on Euronext Paris (FR0004038263 - PARRO).
Financial information is available on http://corporate.parrot.com.
For more information visit: www.parrot.com and its subsidiaries
www.pix4d.com, www.sensefly.com, www.micasense.com.
CONTACTS
|
Investors, analysts, financial media Marie Calleux
- T. : +33(0) 1 48 03 60 60parrot@calyptus.net |
Consumer
and tech media Cecilia Hage - T. : +33(0) 1 48 03 60
60 cecilia.hage@parrot.com |
APPENDICES
The accounts for the first half of the year 2020
were reviewed by the Board of Directors on July 29, 2020. The
statutory auditors have completed the limited review procedures on
the condensed consolidated accounts at June 30, 2020. The limited
review report will be issued once the procedures required for it to
be issued have been finalized.
BREAKDOWN OF REVENUES BY BUSINESS UNIT
AND BUSINESS LINE
|
€m and % of revenues |
Q1 2020 |
Q2 2020 |
H1 2020 |
H1 2019(3) |
Change |
| Parrot
Drones (microdrones) |
3.2 |
23% |
4.9 |
39% |
8.1 |
31% |
16.6 |
42% |
-51% |
| Of
which, legacy consumer products(1) |
0.5 |
4% |
0.5 |
4% |
1.0 |
4% |
3.6 |
9% |
-72% |
| Pix4D
(software) |
6.1 |
44% |
4.7 |
38% |
10.8 |
41% |
10.7 |
27% |
1% |
| senseFly
(drones and sensors) |
3.5 |
25% |
1.8 |
14% |
5.3 |
20% |
8.1 |
20% |
-35% |
| MicaSense
(sensors and services) |
1.4 |
10% |
1.4 |
11% |
2.8 |
10% |
4.3 |
11% |
-36% |
|
Parrot SA |
0 |
0% |
0.1 |
1% |
0.1 |
1% |
0.7 |
2% |
-81% |
|
Intragroup eliminations |
-0.3 |
-2% |
-0.4 |
-3% |
-0.7 |
-3% |
-1.3 |
-3% |
-48% |
|
PARROT GROUP TOTAL |
13.8 |
|
12.6 |
|
26.5 |
|
39.7 |
|
-33% |
|
DRONE TOTAL (2) |
13.4 |
97% |
11.9 |
94% |
25.3 |
96% |
36.1 |
91% |
-30% |
(1) Legacy consumer products: previous drone
ranges (Bebop, Disco, Mini Drones), automotive products (car kit,
plug & play) and connected devices. (2) “Drone total” is an
alternative performance indicator to measure the impact of
strategic decisions; for the periods presented, it is determined by
deducting from the Group’s total revenues the activities that are
at the end of their lives or have been shut down, i.e. Parrot
Drones’ legacy consumer products, Airinov’s revenues and
Airsupport’s revenues.(3) The Group’s total revenues in 2019
include Airinov, which no longer made a contribution in 2020 after
this company was shut down.
CONSOLIDATED INCOME
STATEMENT
|
IFRS in €m and % of revenues |
H1 2020 |
H1 2019 |
|
Revenues |
26.5 |
39.7 |
| Cost of
sales |
(7.2) |
(14.4) |
|
Gross margin |
19.3 |
25.2 |
|
% of revenues |
72.8% |
63.6% |
|
R&D costs |
(21.3) |
(17.1) |
|
% of revenues |
(80.7%) |
(43.1%) |
|
Sales and marketing costs |
(8.7) |
(11.1) |
|
% of revenues |
(33.0%) |
(28.0%) |
|
Administrative costs and overheads |
(6.9) |
(6.6) |
|
% of revenues |
(26.3%) |
(16.6%) |
|
Production and quality costs |
(3.1) |
(3.4) |
|
% of revenues |
(11.7%) |
(8.6%) |
|
Income from ordinary operations |
(20.9) |
(13.0) |
|
% of revenues |
(78.9%) |
(32.7%) |
|
Other operating income and expenses |
(0.05) |
(0.2) |
|
EBIT |
(20.9) |
(13.2) |
|
% of revenues |
(79.1%) |
(33.2%) |
|
Financial income and expenses |
(0.6) |
0.0 |
|
Share in income from associates |
(0.4) |
(0.3) |
|
Corporate income tax |
(0.2) |
(0.2) |
|
Net income |
(22.2) |
(13.8) |
|
Minority interests |
(0.06) |
0.06 |
|
Net income (Group share) |
(22.1) |
(13.8) |
|
% of revenues |
(83.6%) |
(34.9%) |
CONSOLIDATED BALANCE SHEET
|
ASSETS - IFRS, €m |
Jun 30, 2020 |
Dec 31, 2019 |
|
Non-current assets |
20.5 |
20.9 |
|
Goodwill |
- |
- |
|
Other intangible assets |
0.4 |
0.4 |
|
Property, plant and equipment |
2.2 |
2.2 |
|
Right of use |
6.7 |
6.6 |
|
Investments in associates |
5.1 |
5.6 |
|
Financial assets |
4.6 |
4.4 |
|
Non-current lease receivables |
1.2 |
1.6 |
|
Deferred tax assets |
0.2 |
0.2 |
|
Current assets |
145.5 |
168.2 |
|
Inventories |
14.0 |
13.3 |
|
Trade receivables |
6.3 |
10.3 |
|
Tax receivables |
6.7 |
6.0 |
|
Other receivables |
10.9 |
11.2 |
|
Current lease receivables |
0.8 |
0.7 |
|
Other current financial assets |
- |
- |
|
Cash and cash equivalents |
106.9 |
126.6 |
|
TOTAL ASSETS |
166.0 |
189.1 |
|
Shareholders’ equity |
117.8 |
139.5 |
|
Share capital |
4.6 |
4.6 |
|
Additional paid-in capital |
331.7 |
331.7 |
|
Reserves excluding earnings for the period |
(203.5) |
(174.3) |
|
Earnings for the period - Group share |
(22.1) |
(29.6) |
|
Exchange gains or losses |
6.6 |
6.3 |
|
Equity attributable to shareholders |
117.3 |
138.7 |
|
Minority interests |
0.5 |
0.5 |
|
Non-current liabilities |
11.0 |
10.9 |
|
Non-current financial liabilities |
1.6 |
1.5 |
|
Non-current lease liabilities |
5.4 |
5.7 |
|
Provisions for pensions and other employee benefits |
0.9 |
0.9 |
|
Deferred tax liabilities |
0.0 |
0.0 |
|
Other non-current provisions |
1.0 |
0.1 |
|
Other non-current liabilities |
2.9 |
2.6 |
|
Current liabilities |
36.4 |
38.9 |
|
Current financial liabilities |
0.2 |
- |
|
Current lease liabilities |
3.4 |
3.4 |
|
Current provisions |
4.5 |
5.2 |
|
Trade payables |
11.7 |
16.3 |
|
Current tax liabilities |
0.1 |
0.0 |
|
Other current liabilities |
16.5 |
14.0 |
|
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES |
166.0 |
189.1 |
CASH-FLOW STATEMENT
|
IFRS (€m) |
Jun 30, 2020 |
Dec 31, 2019 |
|
Operating cash flow |
|
|
|
Earnings for the period from continuing operations |
(22.2) |
(29.6) |
|
Share in income from associates |
0.4 |
0.6 |
|
Depreciation and amortization |
2.5 |
(10.5) |
|
Capital gains and losses on disposals |
(0.0) |
1.0 |
|
Tax expense |
0.2 |
0.4 |
|
Cost of share-based payments |
0.5 |
1.5 |
|
Net finance costs |
0.1 |
0.1 |
|
Cash flow from operations before net finance costs and
tax |
(18.5) |
(36.5) |
|
Change in working capital requirements |
1.0 |
3.7 |
|
Tax paid |
(0.2) |
0.5 |
|
Cash flow from operating activities (A) |
(17.7) |
(33.2) |
|
Investing cash flow |
|
|
|
Acquisition of property. plant and equipment and intangible
assets |
(0.8) |
(1.4) |
|
Acquisition of subsidiaries. net of cash acquired |
- |
(1.0) |
|
Acquisition of long-term financial investments |
(0.3) |
(0.5) |
|
Disposal of property. plant and equipment and intangible
assets |
0.0 |
0.1 |
|
Disposal of subsidiaries. net of cash divested |
- |
- |
|
Disposal of investments in associates |
- |
- |
|
Disposal of long-term financial investments |
0.4 |
0.5 |
|
Cash flow from investment activities (B) |
(0.6) |
(2.2) |
|
Financing cash flow |
|
|
|
Equity contributions |
0.0 |
0.0 |
|
Receipts linked to new loans |
0.7 |
0.0 |
|
Cash invested for over 3 months |
- |
(0.3) |
|
Net finance costs |
(0.1) |
(0.1) |
|
Repayment of short-term financial debt (net) |
(2.4) |
(0.2) |
|
Sales / (Purchases) of treasury stock (4) |
- |
0.0 |
|
Cash flow from financing activities (C) |
(1.8) |
(0.5) |
|
Net change in cash position (D = A+B+C) |
(20.1) |
(35.9) |
|
Impact of change in exchange rates |
0.4 |
0.7 |
|
Impact of changes in accounting principles |
- |
- |
|
Cash and cash equivalents at start of period |
126.6 |
161.5 |
|
Cash and cash equivalents at end of period |
106.9 |
126.3 |
***
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