Strategy and business model
DNA preserved by keeping R&D and production in France
OVERALL GROSS PROFIT MARGIN
The desire to keep Lectra’s R&D and production in France has enabled the company to develop both a unique offer and improve its competitive position thanks to innovation, while protecting its industrial property. While its main competitors chose to manufacture in China and now face continuously rising wages and social charges, which, together with inflation and the appreciation of the yuan, have increased their production costs, Lectra has achieved its highest-ever gross profit margins on equipment, thus confirming the relevance of its strategy.
Based in France, Lectra has built up a major worldwide presence since the 1980s. Today the company has 32 subsidiaries and close to 1,500 employees with 50 different nationalities. The density of its unparalleled international network enables Lectra’s teams to deliver its value proposition throughout the world by adapting it fully to each local market and by relying on real-time intervention from its experts in its five international Call Centers. Lectra is always close to its customers and can accompany them wherever they are located.
A transnational company
FURTHER STRENGTHENING THE BUSINESS MODEL
A solid, proven business model
50% 42% 58% 50%
Revenues from new systems sales Recurring revenues
Lectra’s business model is based on three pillars: 1. A balance of risks, which benefit from natural hedging by the distribution of business activity over market sectors and geographical markets with cycles that are different from each other, and by the very large number of customers throughout the world. 2. A balanced revenue mix between revenues from new systems sales, the company’s growth driver, and revenues from recurring contracts and spare parts and consumables, a key factor in the company’s stability, that provide a cushion in periods of difficult economic conditions. 3. The generation of annual free cash flow exceeding net income(1).
(1) Assuming utilization or receipt of the annual research tax credit and the competitiveness and employment tax credit applicable in France.
2016 objective >
LECTRA — 2014 ANNUAL REPORT