SES-imagotag: 9M Sales 2021

SES-imagotag: 9M Sales 2021

Best 9-month sales ever – Growth in line with targets

  • Q3 sales at €87 million (+19%) and 9-month sales at €290 million (+51%)
  • Record Q4 expected in line with annual sales target of about €400 million, subject to the evolution of the pandemic in Asia
  • Q3 order entries at €139 million (+59%), and 9-month at €449 million (+77%)
  • Value-added solutions (VAS) sales exceeded 15% of total sales over the last 9 months
Sales (€m) Europe Rest of World Total
Q3 2021 62.4 25.1 87.5
Q3 2020 48.6 24.8 73.4
Change (%) +28% +1% +19%
9M 2021 219.5 70.8 290.3
9M 2020 129.7 62 191.8
Change (%) +69% +14% +51%
Rolling 12-month 2021 296.4 92.3 388.8
Rolling 12-month 2020 191.2 76.6 267.7
Change (%) +55% +21% +45%

Thierry Gadou, SES-imagotag Group Chairman and CEO commented: “Q3 was consistent with our expectations, showing sustained demand for the VUSION platform and excellent sales momentum, all the while reflecting known and anticipated tensions on the supply of components and the impact of the 4th wave of COVID on our production lines in Vietnam. Nonetheless, we achieved our best 3rd quarter ever, and cumulative sales at the end of September already exceed the whole of 2020, up +51%. These figures would have been even higher without the aforementioned obstacles. We remain confident to reach our annual objectives and we are most satisfied with continued gains in the penetration rate of our value-added solutions among the installed base. The digitization of physical commerce is at the top of retailers’ agenda. SES-imagotag is illustrating and implementing its most innovative achievements every day all over the world. The outlook for the coming years is excellent.”

Growth in line with annual targets: +51% in the first 9 months
Sales for the first nine months of the year came to €290 million. This is approximately the same amount as sales for the entire year of 2020, and translates to a growth of +51% compared to the same 9-month period last year. This performance supports our full-year revenue forecast of about €400 million, given the significant activity expected in Q4.

Current growth is being driven primarily by Europe (+69%). Sales in the rest of the world and particularly in the US (+14%) have been negatively affected by the pandemic’s impact on the production lines dedicated to the US market in Vietnam even though the order book is at record levels. Business outside Europe (ROW) nonetheless accounted for 24% of total sales (more than €70 million over the last 9 months), in line with the VUSION-23 plan.

Q3 growth slowed by pandemic-related shutdown of our Vietnam plant
Third quarter sales stood at €87 million, up +19% versus the Q3 2020. While the Group delivered its best-ever Q3, activity was negatively affected, as mentioned above, by the combined effects of the semiconductor shortage and the fourth wave of COVID-19. The latter particularly affected countries in Southeast Asia. The Jabil plant in Vietnam, which produces VUSION smart labels for the US (due to tariffs on Chinese imports) was almost entirely paralyzed for most of the quarter, and is expected to return to normal activity in November. This had a negative impact on North American Sales, which however was offset by excellent order entries in the USA, a rapidly growing market for SES-imagotag (doubled vs. last year’s 9-month mark).

Still strong order entries momentum
Orders in the 3rd quarter amounted to €139 million, up +59%, an unheard-of level in a traditionally quieter period. Order entries for the first nine months of the year stood at €448 million (+77%), with above-average order growth in the United States.
The cumulative total for the last 12 months stands at a record €651 million, a jump of +75% compared to the same period one year ago.

(€m) 2021 2020 %
H1 309.3 165.5 +87%
Q3 139.2 87.7 +59%
9M 448.5 253.2 +77%
Rolling 12-month 650.7 372.4 +75%

Continued growth of Value-Added Solutions (VAS) on the VUSION Platform
Growth in non-ESL innovative Value-Added Solutions (VAS) was also strong over the first nine months, generating revenues of €44.5 million, amounting to 15% of sales, up 2 points versus 2020 (13%). Cloud revenues and the increasing numbers of solutions being added on to the VUSION installed base, as well as the successful launch of Captana —a computer-vision-based, artificial intelligence solution enabling real-time shelf monitoring and automatic stockout detection were the drivers behind this growth.

The continued growth of Value-Added Solutions underlines the importance of the combined hardware/software strategy and offer behind the VUSION platform and contributes to offsetting the negative impact of component price increases on margins.

Cash Position
Net cash position before IFRS16 stood at €7.3 million, netting the Group available cash of around €88 million.

Outlook
Barring an unexpected worsening of the pandemic in Asia or of the global component supply chain, the Group anticipates strong business in Q4 and expects to achieve its unchanged annual target of about €400 million, i.e., annual growth of nearly +40%.

Despite increasing component prices, SES-imagotag remains confident in its ability to continue improving profitability in 2021. Furthermore, the current order entries momentum reinforces the prospect of strong growth for 2022.

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