2020/2021 Q1 revenues
SII Group, which specialises in engineering businesses, has announced its first quarter revenues for the 2020/2021 financial year.
Eric Matteucci, Chairman of the Management Board, commented: “This first quarter of the 2020/2021 financial year is in line with forecasts announced. Against the backdrop of the health crisis linked to COVID-19 along with an unprecedented economic crisis, SII Group has registered an organic reduction in its activity of 7.3%. All our teams were fully mobilised during this period in order to allow us to continue our activities when possible, and are currently working to win new contracts so that the group can return to its historic levels of development. This dynamism will help us get back on the growth path ".
* excluding external growth and exchange rate effects (exchange rate 2019-2020 applied to 2020-2021 revenues)
SII Group, a specialist in engineering businesses, registered revenues of €147.4 million during the first quarter of the 2020/2021 financial year, down 9.3%. Activities were mainly impacted in France, Germany, Spain, Canada and the Netherlands in aeronautics, defence, transport and tourism. International growth, which notably came from Poland, Romania, Colombia and the United Kingdom, was punished by exchange rates with the euro in several countries.
Variation in activities depending on geographic zones
In France, SII Group registered revenues of €67.6 million during the first quarter of 2020/2021. The activity was particularly affected in aeronautics and defence where activities were either stopped or put on hold as a result of the lockdown. The economic crisis caused by the health crisis also reduced activities in other sectors such as car-making, transport, tourism and distribution. Sectors such as telecommunications, energy, banking and insurance, on the other hand, managed, overall, to resist during the period. All in all, the fall in activity in France was 21% over the quarter. SII Group resorted to part-time activity during this period in order to lessen the impact of the crisis. It seems like the low point was reached during the month of May 2020 and a moderate but sustained upturn in activity emerged in June 2020. So long as a second wave of the virus does not wipe out this trend, the second quarter of the year should register a better performance.
Internationally, the situation is one of stark contrasts. The major difficulties appeared in countries where the SII Group is exposed to the aeronautical sector (Germany, Canada, the Netherlands), the automotive sector (Germany, Spain, Czech Republic), transport and tourism (Spain). Poland, where exposure to different sectors is very diversified, registered exceptional resistance (22.8% organic growth). Three other countries supported international development: Romania (+15.6%), Columbia (+17.3%) and the United Kingdom (+39.1%). The rise of the euro over the last year against almost all the currencies of the countries where SII Group is based had a marked negative effect on the international performance.
This first quarter was punished by several suspensions of activity during the lockdown period. This also led to a deep economic crisis in several sectors of activity which stopped many projects. For SII Group, it looks like the low point in activity was reached in May 2020. However, we must be very cautious given potential developments in the health situation.
If the health situation stabilises, next quarter is expected to register an improvement in the situation in France with a less pronounced reduction in activity than in the first quarter, and a continuation of international growth at a rate equivalent to that of the first quarter.
Improvement in international operating margin
10% organic growth expected in 2021-2022
Return to growth in France in Q4: +3.0%
International growth: +8.2%
Continued gradual recovery in activity in France
International activity still growing in Q3: +1,8%