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.
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.
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.
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.
Oncodesign has restructured its business into three distinct business units (BU): Service, Biotech, and AI. Each BU will have its own objectives and delivery organization.
NelsonHall has published a new blog about how Accenture, through Industry X.0, is not only targeting product design and engineering opportunities but also digital manufacturing.
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.
Capgemini’s acquisition of Altran will be delayed by up to six months. Edge Fund Elliott has, through intermediaries, brought, the case to court. The initial ruling on December 4 will decide if the acquisition will be suspended. A final ruling will occur by end of the March at the latest.
The performance of major ER&D service vendors showed great diversity in Q2. Alten showed, as always, very solid growth (+ 12.4% at CC/CS) and so did HCL Tech (+13.3% at CC).
The purpose of ERDservices.org is and remains the ER&D industry across embedded systems, mechanical engineering, digital offerings, and technical documentation. We are starting the coverage of a different type of vendor: Sweco in infrastructure and building engineering vendor headquartered
Last week, KPIT Technologies, returned to India’s BSE and NSE. The company now has a market cap of approximately USD 410m with its share was introduced at a price of INR 99 and traded in the past few days between INR 103 and INR 115. KPIT has succeeded in its IPO and is now an ER&D service pure-play having sold its IT services business to Birlasoft.
Altran has phased out the Aricent brand in North America and now trades under the Altran brand. The company highlights it now has three primary brands: Aricent for its core ER&D services, Cambridge Consultants for its “innovation consulting” capabilities, and Frog for product design
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.
Accenture has opened a new “Industry X.0 Innovation” center. The new center is located in Bilbao, Spain, once an industrial city that has grown significantly in the past twenty years.
Several readers reacted to the birth on February 22, 2019, of ÅF Pöyry. They argue that ÅF Pöyry has become a building engineering-centric firm and now shares more with the likes of Sweco, Arcadis, or SNC Lavallin in Canada, than with Altran, or HCL Tech.