First-half 2020 revenue

1 Unaudited figures.

First-half 2020 revenue was heavily affected by the Covid-19 pandemic. As expected, the drop in revenue was due both to the sharp downturn in the aeronautics market and the impact of health measures on production and project execution. First-half 2020 revenue for ECA Group was down 24.5% to €43.1 million, including a 42.8% decline in second-quarter 2020.
At June 30, 2020, the Group's backlog was at a high level of €531 million. The Group maintained strong business momentum in second-quarter 2020; excluding the Belgian-Dutch contract, orders booked in that period were higher than those booked in second-quarter 2019.

In the Robotics division, revenue was down 18.9% to €31.1 million in first-half 2020, including a 36.7% decline in second-quarter 2020. This decline was mainly due to a strong base effect, but also to a quarter marked by a heavier workload in design phase than in production phase for projects under way.

The division's backlog stood at €508.9 million at June 30, 2020, up 2.8% compared to March 31, 2020. During the second quarter, the division recorded significant commercial successes, in particular a contract worth about €4 million for the supply of steering consoles for the South Korean submarine JANGBOGO III, together with an export contract worth nearly €20 million to modernize robots dedicated to mine countermeasures.

In the Aerospace division, revenue posted a decline of 36.1% in first-half 2020, totaling €12 million. The health crisis implied a strong reduction in activities for aeronautics customers.
The division's backlog stood at €22.1 million at June 30, 2020, up 9.1% compared to March 31, 2020. Orders booked in the second quarter of 2020 were stable compared to second-quarter 2019, in particular with an order worth more than €3 million for testing means for aeronautic assembly lines.

2020 outlook

The health situation and macroeconomic environment remain uncertain, especially in the Aerospace division, which could be affected in the long term. In this context, the Group will accelerate its plan launched in 2018 to implement commercial and technology synergies between its divisions.

The business slowdown will affect the profitability of the first-half year. Moreover, the Group is conducting an in-depth review of the consequences of the crisis and, in particular, any impairment losses. This depreciation would have no effect on cash.

The Group is confident in its outlook and expects revenue to recover in second-half 2020, while remaining cautious with respect to uncertainties linked to the macroeconomic environment. The Group has an excellent backlog of more than four years of revenue, a solid financial position with available cash of €24 million at June 30, 2020, and is positioned on markets – in particular defense– that should be preserved in the short and medium term.

Thus, ECA Group is expecting to sign an export contract worth more than €20 million in third-quarter 2020, for the supply of mine countermeasure systems. This new four-year project reflects the strong momentum of the Group's technologies.

Next financial release

First-half 2020 results released on Tuesday, September 22, 2020, after market closing.

Guénaël Guillerme, Chief Executive Officer, and Loïc Le Berre, Groupe Gorgé Chief Finance Officer, will comment on ECA Group’s results at this time and answer questions from the financial community during a conference call in French starting on Wednesday, September 23 at 11:30 a.m.

A presentation and replay of the conference call will be available on ECA Group's website.