More Diversification And Sustainability Ahead For Ricardo

/ November 1, 2021

Ricardo announced in September its priorities for the years to come: further client diversification, a focus on Asia and North America, a continued refresh of its service portfolio, and sustainability in all its forms. These priorities are very much in line with Ricardo’s strategy in the past few years.

Accenture Gets Big in Germany with Umlaut

/ June 15, 2021

Accenture made a big move with the acquisition of Umlaut, an ER&D vendor headquartered in Germany. The transaction comes as a surprise: umlaut brings EUR 350m in revenues. It is the first sizable acquisition that Accenture made for Industry X. Up to now

M&As: Many Tuck-In Acquisitions and Cognizant ESG

/ April 14, 2021

ER&D vendors continue to be very active in M&As, with many tuck-in acquisitions. AFRY is now in full acquisition mode with six transactions in 2021 YTD. Competitor Sweco has also accelerated with four transactions. Accenture has made an unusual transaction by taking over a manufacturer of industrial automation and robots in Brazil for Accenture Industry X. Finally, Cognizant acquired a significant German automotive ER&D vendor, ESG.

Akka Shifts its US Strategy and Goes India-Centric

/ March 12, 2021

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.

DXC Turns Down Atos’ Bid as Low

/ February 6, 2021

Unsurprisingly, DXC Technology turned down Atos’ offer to acquire the firm. DXC considered it, USD 10bn, as reported by Reuters, as too low. The company considers it is going through a turn-around. Also, 16 months into the job, DXC’s CEO, Mike Salvino, believed it was too early to sell the Tysons, VA-based firm.

UPDATED: Atos Approaches DXC in a USD 10bn Transaction

/ January 7, 2021

Following a Reuters news release, European IT services vendor Atos confirmed it had submitted to the Board of DXC an unsolicited non-binding offer to acquire the firm. The offer is at a preliminary stage. Reuters estimated Atos’ offer to USD 10bn.

Akka Raises EUR 200m. Share Up 40%

/ October 7, 2020

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

Ricardo Suffers from its Exposure to Automotive in FY20

/ September 14, 2020

Ricardo paid the price for its exposure to the automotive sector, which represents 55% of total revenues. After a stable H1 FY20 (the ending June 30, 2020), H2 collapsed with revenues down 23% at cc/cs (our estimate). Surprisingly, Ricardo performed worse than an automotive pure-play such as EDAG (-14.8% during the same period) and Akka (-20.3% at cc/cs).

Bertrand Does Better than Competitors in Q3

/ September 6, 2020

Bertrandt reported its Q3 FY20 results (calendar Q2 2020). Revenues were EUR 205m, down by a massive-20.9% yoy, and the EBIT margin was -0.9% (Q3 FY19: +2.7%). Yet, Bertrandt’s results were better than those of EDAG ( yoy revenues down by 32.6%) and Akka (-31.4% yoy at CC/CS).

EDAG Declined by 33% in Q2 2020

/ August 30, 2020

We were expecting EDAG would have a difficult Q2, as the company is very European and services mostly the automotive sector. However, we had not anticipated a decline of this scale: revenues were down by 32.6% in Q2. Unsurprisingly, the EBIT margin was significantly in negative territory (-14.4%).

Unofficial: Renault Selects its Four ER&D Preferred Vendors

/ July 24, 2020

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.

Earnings Preview: Revenues of Alten to Plunge in Q2

/ July 15, 2020

ER&D’s largest pure-play globally, Alten, will be announcing its Q2 2020 revenue by the end of July. The company had a very decent Q1, with a 4% CC/CS revenue growth. However, it warned that revenues would be down by ~22% in Q2.

Expleo’s New CEO: A Perfect Resume and Daunting Challenges

/ July 3, 2020

We just learned that Expleo has a new CEO, Rajesh Krishnamurthy. On paper, Mr. Krishnamurthy, has everything right for Expleo. He is a French citizen of Indian origin. He has held senior roles at Infosys, including one as head of the Energy, Utilities, and Telco division, a major responsibility as Infosys is organized by vertical. He also led Infosys Global Consulting.

Ricardo Exits the Automotive Engine Testing Business

/ June 16, 2020

Ricardo divested, as expected, its engine testing and prototype facility in Belleville, MI. The company had looked for a buyer for more than one year and even bought the property to make the sale of the facility easier.

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

/ April 7, 2020

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.

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

/ March 11, 2020

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.