Lectra Navigates Revenue Dip with Growing Recurring Business Amidst Trade Tensions

Lectra, the Bordeaux-based specialist in cutting solutions and machinery for the flexible materials industry, reported revenue of €383.1 million for the first three quarters of its current financial year. While this figure represents a 2% contraction overall, it notably masks a 2% increase in recurring revenue, which now accounts for a significant 75% of total revenue.

The third quarter presented particular difficulties for Lectra. Revenue saw an 8% decline on a reported basis and a 4% decrease on a like-for-like basis, totaling €121.8 million. This challenging period also impacted profitability, with net profit falling by 29% to €7.2 million.

Over the January to September period, the group generated EBITDA before non-recurring items of €62.6 million, an 8% drop on a like-for-like basis. This performance is indicative of a challenging business environment, where customers are adopting a cautious "wait-and-see" approach. The ongoing U.S. trade war, particularly its impact on trade relations with Mexico, China, and India, has been a significant factor, prompting Lectra to maintain a cautious stance for the remainder of the year.

Despite the immediate headwinds, Lectra identifies potential long-term opportunities arising from current global dynamics. The company stated, "The need to diversify sources of supply and their countries of origin remains relevant for all affected companies. This could, in the medium and long term, entail additional production capacity and create business opportunities for Lectra." Notably, less than 10% of Lectra's revenue comes from European or Chinese exports of equipment, consumables, and parts to the United States, limiting its direct exposure to certain aspects of the trade conflict.

Looking back at its most recently completed financial year, Lectra, which employs a workforce of 3,000, reported revenue of €526.7 million for 2024. This represented a robust 10% increase over the 2023 financial year and was accompanied by a 15% rise in EBITDA, reaching €91.1 million.

The financial year 2025 marks the conclusion of Lectra’s current 2023–2025 three-year roadmap. The company is now gearing up for the next phase of its strategy, which will focus heavily on Industry 4.0. The detailed 2026–2028 strategic roadmap is slated for presentation on February 12. In the current challenging economic climate, the group is committed to prioritizing and reinforcing its fundamental operations and core business principles.