Dassault Sytems Lowers its Q1 2020 Guidance: Read-Throughs for the ER&D Service Industry

Dassault Sytems Lowers its Q1 2020 Guidance: Read-Throughs for the ER&D Service Industry

Dassault Systems lowered it Q1 2020: the company is now expecting revenue growth in the range of 14%-17%, down from a 20-23% guidance (that includes the acquisition of Medidata). The company has suffered from weaker than expected new license and services revenues. Meanwhile, revenues of Medidata were on a “momentum and license renewals were up too.

Covid-19 Will Mostly Impact the ER&D Onshore Industry

Covid-19 Will Mostly Impact the ER&D Onshore Industry

Since we published our last note on the impact of Covid-19 on ER&D spending, the situation has changed with Covid-19, having now spread to Europe and soon the US. Already, The European Central Bank is predicting a GDP decline of 5% in 2020, based on the impact of three months of confinement.

Tuck-In Acquisitions Continue Despite the Stock Markets Melt-Down

Tuck-In Acquisitions Continue Despite the Stock Markets Melt-Down

Despite the stock market melt-down, ER&D vendors have continued to make tuck-in acquisitions in the past two weeks. The acquired firms were of small size and not likely to impact the net debt of their new owners. However, should the Covid-19-China-US trade-war-Stock Markets meltdown-oil price crisis degenerate into a recession, we expect suck tuck-in acquisitions to become scarce.

The Head of Tech Mahindra IES Becomes COO at Cyient

The Head of Tech Mahindra IES Becomes COO at Cyient

Karthik Natarajan, the former head of Tech Mahindra’s Integrated Engineering Services (IES), has joined Cyient as COO. We think, the appointment of Mr. Natarajan is a welcome move for Cyient, which has faced growth challenges in the past quarters, resulting from its client concentration and its exposure to Boeing and Pratt & Whitney.

Bertrandt: Soft Quarter in Q1 FY20

Bertrandt: Soft Quarter in Q1 FY20

Bertrandt had a soft quarter in Q1 FY20 (corresponding to calendar Q4 2019): revenues were flat (+0.4%) to EUR 263m, impacted by project delays, and reduced utilization rates in its Digital Engineering (DE) unit (-3.0%). DE, Bertrandt’s largest unit (55% of revenues), suffered from Germany OEMs shifting their R&D spending to digital.

Altran Suffers from a Temporary Slowdown in Q4

Altran Suffers from a Temporary Slowdown in Q4

Altran’s organic growth slowed down to +3.3% yoy in Q4. The company suffered from two main effects: Brexit delaying decision-making in the UK and deteriorating market conditions in the German automotive market. As a result, Altran’s North Europe and Central Europe business units were down by respectively 9.6% and 8.4% yoy in Q4.

Alten Slows Down in Q4. Points to Market Adjustment

Alten Slows Down in Q4. Points to Market Adjustment

Alten’s revenues in Q4 slowed down to a growth of +7.3% yoy (at CC/CS ), following double-digit CC/CS growth during Q1-Q3 2019. The company suffered from a demanding comparison basis (+13.7% in Q4 2018), and one lesser working day in several countries (a 0.15% impact on the group’s revenues).

IT Services and ER&D: Convergence or Overlap?

IT Services and ER&D: Convergence or Overlap?

The industry loves to talk about convergence, especially between ER&D and IT services. As an industry analyst, I must say that I have never seen such porosity between IT service and ER&D services vendors.

LTTS Unexpectedly Slows Down in Q3 FY20

LTTS Unexpectedly Slows Down in Q3 FY20

LLTS’ revenue growth in Q3 FY20 decelerated from 11.9% at CC in Q2 to +7.5% in Q3. The company was hit by a deteriorating situation in its Telecom & High-Tech (-26%), which was impacted by the ramp-down of two clients in its Semiconductor sub-vertical that represents (we estimate) 40% of its Telecom & High-Tech sector. LTTS, also, had flat growth (+2%) in its Industrial Products, with large accounts reducing their spend.