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Modis came into the light two weeks ago when Adecco announced the acquisition of Akka. Modis is a decently large IT services firm with 2020 revenues of EUR 2,179m. It is little-profitable with an adjusted EBITA margin of 5.7% (2019: 6.3%). Like everyone, the company faced headwinds in 2020, with revenues down 9% in 2020 (2019: -3%).
Akka Technologies made a significant shift in its US strategy with the appointment of Dharam Sheoran. Mr. Sheroan joined from Wipro and must have been an ideal candidate for Akka. At Wipro, he headed several global service lines, including automotive and A&D. His experience, therefore, matches Akka’s presence and ambitions in the country.
Akka had a busy end of the year: it completed its capital increase and unveiled a
Europe has now entered its second lockdown. The lockdowns have different restrictions levels and different lengths. The UK and France are running for the full month of November. Officials in the two countries have, however, warned the lockdown might last longer, until Christmas at least.
Akka’s share was up by almost 40% on Tuesday (October 6). The company reassured investors by raising EUR 200 at favorable terms for existing shareholders
Revenues Collapsed in H1 2020 Akka suffered greatly in H1 2020, with revenues down by 20.3%
According to unofficial sources, Renault has now finalized its list of preferred ER&D service vendors, reducing it from nine vendors to four. The four winners are Akka, Bertrandt, Expleo, and Segula. They will now grab 80% of Renault’s ER&D spending and double their market shares.
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.
The Aerospace Industry’s Outlook Has Changed in Less Than Two Months We now have visibility on
Akka has not provided a guidance for 2020. The company expects to suffer in H1, from automotive, aerospace and Covid-19
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.
After its unexpected revenue growth slowdown in Q4, Akka suffered from a disappointing result: it secured only 64% of the shares of Data Repons. Akka has received regulatory clearance from the German cartel office authority, so now has control over Data Response.
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In a November blog, we had mentioned that Akka had issued €175m in convertible bonds. Akka
We don’t usually comment on the financial performance of ER&D service vendors beyond their financials. But this time, this is a little bit different: Akka Technologies raised yesterday EUR 175m in convertible bonds, a significant amount for Akka, which has a market cap of EUR ~EUR 1.2bn.
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Akka surprised investors with a CC/CS revenue growth slowdown in Q2 2019: revenues were up 5.1% yoy at CC (vs. 6.6% in Q1). Utilization declined by 50 bps yoy, and attrition (excluding PDS Tech) was up by a massive 530 bps, to 23.3%.
Akka has a somewhat soft financial performance in Q1 2019. The company’s organic (CC/CS) revenue growth reached 6.6%, impacted by a lesser number of working days yoy, a 0.5% sequential decrease in its headcount, and by high attrition (20.8%, up by 230 bps yoy).
We are now entering the season for Q1 earnings, and as always we will look into changes in major trends. The state of the automotive industry will be an area we will be closely monitoring.
During its presentation of its 2018 results, Akka provided some light on key its priorities. Here is a summary of these priorities.
Akka performed well in full-year 2018: revenues were up 9.5% at CC/CS to EUR 1,505m. The company demonstrates, quarter after quarter, its ability to grow quickly in geographies, large or small
We have created an interim ranking of the top ten ER&D service vendors. Several large ER&D
2018 was an eventful year: the top ER&D vendors accelerated their M&A activities. Alten continued to deploy its business model. HCL Tech’s ERS unit had a superb year