The year 2020 opened on the COVID-19 pandemic, first in China and then above all in Europe, as well as in the majority of locations where the Group operates. With this health crisis, the world experienced its worst recession in decades, and its effects lasted beyond the sudden stop of the second quarter.

In this context, and given the lack of short-term prospects for the end of the crisis, the majority of the Group’s clients adopted a wait-and-see approach with regard to investment decisions, which were continually postponed; meanwhile, some service activities were affected by a number of plant shutdowns and the inability to go to customer sites. Only Smart Automation Solutions continued to grow, driven by underlying factors linked to e-commerce and distribution (automated logistics platforms), for which the potential was further enhanced by the constraints imposed by the health crisis.

In the light of these trends, orders placed with the Group in 2020 amounted to €1,612 million, down 12% on 2019 (€1,841 million), with however extensive disparities according to market segment. Smart Automation Solutions went up by 16%, whereas High Precision Machines and Process Technologies were down 22% and 36% respectively.

Order intake by activity  (€ millions)

In geographic terms, the impacts have been strongest in Europe, where the lockdowns have been the most rigorous, and where the Group Subsidiaries, heavily reliant on exports, have been penalized by travel restrictions. In contrast, Subsidiaries mainly serving their local markets performed better. Order intake even grew in North America, while Japan - relatively unscathed - and China - bouncing back thanks to the government’s proactive policy - have in the course of the year recovered the ground lost in the first quarter.

Order intake by geographical area (€ millions)

As an engineering group accounting for most of its sales by percentage of completion and benefiting from an order book worth €1.4 billion at the start of the 2020 fiscal year, Fives had workload to execute, avoiding full business suspension.

Sales for 2020 amounted to €1,610 million, which is down nearly 20% on 2019 (€1,999 million). On top of the effect of the lower opening order book, the consequences of the health crisis were felt in two ways. First, the fall in order intake - along with a number of orders that were finally booked during the year, but after several months of delay - negatively impacted activity; High Precision Machines (-30%) and Process Technologies (-26%)  were particularly affected. Second, travel restrictions and the closure of customer sites led to a slowing of progress in ongoing projects; Smart Automation Solutions thus recorded a (slight, at -7%) reduction in sales, despite the growth of its order book.

Group EBITDA was €81 million in 2020, down €39 million on 2019 (€120 million). This fall was attributable to the consequences of the COVID-19 crisis, as lower activity volumes, impacting both sales and margins (through lower absorption of salaries and fixed production costs), have not been fully offset by the benefit from temporary support measures (partial unemployment, grants, social contribution exemptions) implemented by governments of the countries where the Group operates.

The Group ended 2020 with an order book standing at €1,372 million, down €30 million on 2019 (€1,402 million) due to forex effects (-€32 million). At constant exchange rates, Fives was therefore able to stabilize its order book in spite of the pandemic, and without compromising quality, with the embedded margin also remaining stable.

Order book by activity  (€ millions)

Furthermore, the Group starts 2021 with nearly €300 million cash on hands. This comfortable level of liquidity notably achieved thanks to loans guaranteed by the French, Italian and American states, secures the Group's ability to continue its operations under good conditions and to support the growth of its various activities.

Sales in 2021 should grow, driven by strong growth in Smart Automation Solutions’ order book, while the recovery from the crisis anticipated from the second quarter (in particular thanks to acceleration in the vaccination process) should enable High Precision Machines and Process Technologies - whose break-even points have been further lowered - to bounce back after the low point reached at the end of 2020. The massive stimulus packages planned by governments should also encourage a more distinct recovery from mid-2021.