2015, A TRANSITION YEAR
TRONICS WILL REAP THE BENEFITS OF PORTFOLIO DIVERSIFICATION IN 2016
Grenoble, France and Dallas, TX, USA – 19 January 2016 – Tronics, a designer and manufacturer of innovative nano and microsystems, is listed on the Paris alternext market (isin code: FR0004175099 - ALTRO).
A transition year but the outlook for growth remains promising over the medium term
Despite significant progress MADE in winning new customers, 2015 was a transition year with revenue of €7,755K versus €11,612K in 2014. After a first half characterized by strong engineering activity and under-performance in manufacturing, the second half of 2015 was, contrary to all expectations, also mixed.
Overall, the favourable business momentum was not enough to offset 1/ a significantly lower volume of orders than that announced at the beginning of the year, 2/ the long lead times involved in a complex engineering program, 3/ a lack of revenue from the historical customer (€1.8M in 2014).
This level of activity will weigh substantially on the 2015 results, the Group having restructured itself at the beginning of the year to achieve growing revenue. For the full year, the Group is therefore expected to report an operating loss in the region of €3M.
Business development and reduction in breakeven point to return to balanced conditions as early as 2017
Following this year of business development, the Group expects the new momentum from customer diversification and the numerous completed engineering projects will gradually bring success starting in 2016. Production of innovative products in the life sciences, watchmaking and avionics sectors should thus be launched in 2016.
Given the current backlog, the Group estimates that 2016 revenue should show strong growth and approach that of 2014, i.e. around €11M. The revenue stream will be weighted towards the second half of the year. This objective does not rely on companies or markets which experienced difficulties in 2015.
At the same time, in order to accelerate the return to operating breakeven expected in 2017, Tronics has launched a cost reduction program. This action plan is being implemented gradually with the goal to save €700K in 2016, or approximately 9% of 2015 fixed costs.
Analysis of 2015 consolidated revenue – unaudited
|in €K (IFRS)||2015||2014|
The momentum of the engineering activity recorded in the first half of the year slowed down in the second half, as it was particularly impacted by the longer-than-expected lead times in a complex, high value-added engineering program. Billing for this project has been postponed to the first half of 2016. As a result, engineering revenue totalled €2,401K in the second half of 2015 versus €3,297K in the first half and €4,057K in the second half of 2014.
As announced, the manufacturing activity in the second half of 2015 was higher than the first half and progressed to €1,156K versus €901K in the first half. This better performance was due in particular to the launch into production in Q4 of promising new projects in life sciences in the United States. However, the manufacturing activity remained below expectations in the second half, due especially to FINANCIAL difficulties at one of the Group's customers. The full year was impacted by lower revenue from the Group's historical customer, which was less than €50K in 2015 versus €1.8M the previous year.
Penetration of new markets continued. The life sciences segment is experiencing good growth and represented 12% of overall revenue over the period (versus 2% in 2014).
The geographic distribution of the revenue as of 31 December 2015 shows the ramp up of the Group at the international level. By region, Europe represented 74% of sales, Asia 16% and North & South America 10%.
« After a clearly disappointing 2015, during which significant orders from two customers did not materialize, we are entering 2016 with confidence and foresee a return to balanced conditions as early as 2017. The Group is robust and has a solid cash position. We are particularly looking forward in 2016 to a recovery in growth driven by progress in our manufacturing activity. We also have a strong pipeline of new programs in various promising sectors such as mobility and BioMEMS, as well as products with high added value in the industrial field. Our business momentum continues to accelerate internationally and partnerships with key industrial players (Thales, Airbus, etc.) are ongoing with interesting perspectives in the promising sectors of high performance inertial sensors (GYPRO®) », said Pascal Langlois, ceo of Tronics.
|Press releases*||Information meetings|
|2015 annual results||24 March 2016||31 March 2016|
|2016 half year results||21 September 2016|
* Release after the closing of the Paris Alternext market
For more information: www.tronicsgroup-bourse.com
Phone: 00 33 4 76 97 29 50
Amalia Naveira/Marie-Claude Triquet
Phone: 00 33 4 72 18 04 93