the plan. The total number of consultants was 69 (+33), while the total for the R&D teams came to 260 (+42). The transformation plan has resulted in a strengthening of Lectra’s consulting, marketing and software R&D teams, for which the recruitment program was completed at the end of 2014. Investment in marketing has served to enhance Lectra’s image and raise its proﬁle, thanks in particular to its new lectra.com website, which has been online since December 2014, increasingly rich customer testimonials, and a global communications campaign in the fashion and apparel markets. This investment effort will be maintained and bolstered in 2015. The main focus of the far-reaching overhaul and strengthening of Lectra’s sales teams have been the Corporate functions, North America, China, and the Germany and Eastern Europe region. Recruitment generally was behind schedule at the end of 2014, and the overall situation was mixed. Only hiring for Corporate functions and in China has been completed. The corresponding plan was reviewed at the end of the year, on one hand, to readjust the breakdown of new hires over the company’s geographic and market sectors and, on the other hand, to increase the number of pre-sales consultants, given the growing strategic importance for the company’s customers in investing in Lectra’s technologies. The company now expects its sales and marketing teams — including the pre-sales consultants — to have expanded from 232 people at the end of 2011 to 360 at December 31, 2015, and from 17% to 23% of the total headcount. The transformation plan will have enabled a reallocation of resources toward the most strategically important activities as well as the geographical markets and market sectors with the greatest growth potential. The total Group headcount will be 1,540 as planned. The transformation plan will be completed at the end of 2015, and the corresponding investments for the future will total €50 million over the period 2012-2015, as initially planned. Finally, ﬁxed overhead costs will be limited to around €133 million in 2015, based on the chosen parity of $1.25/€1 for the year. The inﬂation-adjusted level for 2015 will be less than in 2007, as anticipated.
Fully Internally Funded Development The company’s annual free cash ﬂow should continue to exceed net income (assuming utilization or receipt of the research tax credit and the competitiveness and employment tax credit applicable in France), enabling it to pursue its policy of paying dividends to shareholders while ﬁnancing its future development. Its goal is to be free of all ﬁnancial debt. Lectra will pursue its dividend-payment policy. Barring further changes to the taxation of dividends in France, the total dividend is expected to represent a payout ratio of around 33% of net income (excluding non-recurring items), the remaining 67% serving to self-ﬁnance the company’s growth. This ratio could exceptionally rise to or exceed 50% until the investments for the future have produced their full impact, insofar as they are already taken into account in the computation of net income and free cash ﬂow. Lastly, besides the Liquidity Agreement, the company will not implement any share buyback plan. It will preserve its cash in order to ﬁnance future targeted acquisitions in the coming years, should the right opportunities arise on favorable terms, while its organic growth continues to be ﬁnanced internally thanks to its business model. Progress Report The balance sheet at the end of 2014 is stronger than expected.
3. CONSOLIDATED FINANCIAL STATEMENTS FOR 2014