Accenture made a rare acquisition in PLM services for its Industry X.0 unit. The company is to acquire a Torino-headquartered PTC partner, PLM Systems. PLM Systems is a small firm and has 30 consultants
COVID-19: Cyient Warns of 15-20% Decline in Revenues in Q1 FY21
Cyient surprised, negatively, the markets by announcing a decline of 9.7% in its Q4 FY20 revenues (to USD 149m) and an adjusted EBIT margin down 440 bps (to 8.4%).
Despite COVID-19, SII Grows – Slightly – in Q4 FY20
Without surprise, French ER&D service vendor SII announced a slowdown in its Q4 FY20 (ending March 31): revenues were up 2.2% at CC/CS during the quarter.
Accenture Industry X.0 Makes Another Acquisition in Digital Manufacturing
Accenture made another acquisition for its Industry X.0 unit. The newly acquired firm is Callisto Integration, an industrial IT specialist that is headquartered in Oakville, Ontario.
Renault Considering R&D Outsourcing to Save EUR 200m Annually
Renault is considering R&D outsourcing to save EUR 100-200m annually. The company currently works with approximately 15 ER&D vendors and wants to reduce its number of preferred partners to five.
PSA To Deploy Systematically Work at Home Policy
During the crisis, PSA more than doubled the number of employees WaH from 18,000 concurrent connections to its IT to 38,000.
Assystem: Unpleasant Surprise in Nuclear Engineering in Q1 2020
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Outlook for the Aerospace Industry: A True Paradigm Shift
The Aerospace Industry’s Outlook Has Changed in Less Than Two Months We now have visibility on
Will COVID-19 Accelerate the Adoption of Additive Manufacturing?
The media have reported numerous examples of volunteers, globally, producing missing equipment, mostly protective masks, for health care professionals exposed to the COVID-19 disease.
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.
EDAG Accelerates its Portfolio Shift in 2020 While Coping with COVID-19
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Capgemini Finally Becomes the Number Engineering and R&D Sevices Vendor
The Stock Market meltdown resulted in an unexpected outcome: Capgemini secured 98.2% of the shares of Altran, with investors rushing to get EUR 14.5 per Altran share. Capgemini will now launch a squeeze-out procedure.
Two Vendors Put on Hold their Financial Guidance. This Is Only the Beginning!
Two vendors, Assystem and Semcon, have put on hold their financial guidance for 2020. This is only the beginning.
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.
Akka: 2019 Results in Line. No Visibility for 2020
Akka has not provided a guidance for 2020. The company expects to suffer in H1, from automotive, aerospace and Covid-19
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.
Akka Launches a Mandatory Offer for Data Respons
Akka has launched a mandatory offer for Data Respons (DR) that will provide shareholders the opportunity to sell their DR shares. The company has been active on the stock markets since the end of its tender offer on February 13, raising its stake from 72.9% to 78.1%. Akka is hoping to reach 95% of shares and launch a squeeze-out offer later one.
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.
Veeva Demonstrates the Clinical Trials Market is Fast-Growing. An opportunity for ER&D Vendors
eeva is a Wall Street darling with an eye-popping market cap of $21bn. The uniqueness of Veeva is that its SaaS applications run on top of Salesforce’s Clouds. This approach positions Veeva in the high-growth ecosystem of Salesforce (which grows by 20-25% each year).
What An Economic Recession Means to the ER&D Industry
The US Federal Reserve yesterday lowered “the target range for the federal funds” by 50 bps to 1%-1.25%. Although the “fundamentals of the US economy remain strong,” “the coronavirus poses evolving risks to economic activity,” communicated the Fed.
Covid-19: Slowdown in ER&D Spending Now Likely
Currently, Covid-19 has only affected China significantly, although having spread in South Korea, Japan, and Northern Italy.
Several ER&D vendors have been impacted so far: Ricardo has warned that the situation in the Chinese automotive market would have a “material” effect on its profit.
Spotlight on EPAM Systems
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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’s Plans for Raising its Margins
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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.