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LISI 2011 —
19
— financial report
Financial situation
The Group has for several years conducted a strategy to gain market
share with its main customers by meeting their highest standards
for reliability and innovation. During fiscal 2011, it strengthened
its relationship with its top customers: indeed, the first 5 of them
represent 38% of the total (32% in 2010) and about 80% of sales are
achieved with the 57th customer (the 90th in 2010).
Highlights for fiscal 2011
The Group continued its policy of strengthening and building its
positions in its strategic markets initiated in 2010 with a fundamental
redefinition of its scope of activity and an ambitious capital
expenditure program.
In fifteen months, it has renewed more than a quarter of its business
portfolio:
– industrial integration into LISI AUTOMOTIVE of the two sites
purchased from Acument (relocation of the Bonneuil-sur-Marne
production facility to Puiseux and capital expenditures at the La
Ferté Fresnel site),
– the contribution of the plant acquired from the Stryker, which was
consolidated as of September 1, 2010, and represents two-thirds of
the LISI MEDICAL division,
– the deconsolidation of LISI COSMETICS as of January 1, 2011,
following the disposal completed April 6, 2011. For the record, the
division generated sales of €52.8m in 2010,
– the takeover of the Creuzet group, which was consolidated as of July
1, 2011 and contributed €58.9million two the sales revenue over six
months.
2011 marks a new stage in the ambitious investment program
launched in 2010: a total of €64.9m was paid out. This was
mainly dedicated to improving production and logistics facilities, to
productivity and to new products. Among these:
– the operational opening of the Delle II site (Territory of Belfort) for
LISI AUTOMOTIVE, enabling it to optimize the logistics of both the
Delle and Dasle (Doubs) sites,
– work to extend the Marmande (Lot-et-Garonne) site for LISI
AEROSPACE Creuzet in order to locate there the new products A350,
B787 and Leap 56
1
,
– the start of the complete rehabilitation of the Grandvillars site
(Territory of Belfort) in order to extend the material preparation
plant of LISI AUTOMOTIVE, including for the German sites.
2011 financial results
LISI AEROSPACE Fasteners was the main contributor to the
improvement in the results, after a substantial decline in 2010, along
with LISI MEDICAL, to a lesser extent. LISI AUTOMOTIVE reported a
slight downturn despite an increase in activity (up €45m). All of the
management indicators have therefore improved, despite the disposal
of LISI COSMETICS.
EBITDA reached €122.1m, corresponding to 13.2% of sales and an
increase of 27.6%. The improvement in the EBIT is particularly marked
with €76.6m (up 54.9%), due to reversals of provisions (+€2.3m in 2011
against -€0.4m in 2010), despite the increase in depreciation (€47.7m
against €45.8m in 2010). Strengthened by LISI AEROSPACE's significant
contribution compared to the low point of 2010, the operating margin
rose by 1.9 points in comparison to 2010.
The non-recurring costs in 2011mainly consist of the capital gain from
the disposal of LISI COSMETICS of +€9.8m, and a provision associated
with the possible disposal of assets in Germany of - €1.6m. Financial
expenses rose to -€1.9m due to additional debt associated with the
acquisition of the Creuzet group (Net debt of €102.6m, resulting
in interest costs of €4.2m) and exchange gains on working capital
(€1.5m).
Tax costs rose sharply, as a result, among other things, of an increase
in corporate tax in France representing €1.6m, and CVAE (tax on
companies' added value)
2
for -€4,7m (-€3,4m in 2010). The average
apparent rate was 27.8% compared to 30.9% in 2010. Consequently,
net earnings reached the historically high level of €58.2m compared to
€32.9m in 2010, corresponding to an increase of 76.8%.
Net earnings per share in 2011 were €5.61 (€3.19 in 2010 and €0.92 in
2009); excluding non-recurring items associated with the disposal of
LISI COSMETICS, earnings would be €4.66.
After returning to dividend growth in 2010, the Group will propose
for approval at the shareholders' General Meeting to set the dividend
at €1.30 per share for the financial year 2011, corresponding to an
increase of 23.8% compared to last year.
The financial structure remains solid after the acquisition of
Creuzet and the major investment program
Up nearly 20% to €95.3 million, cash flow is slightly over 10% of sales
revenue (10.3%). The Group has been able to fund both its program
of industrial equipment and structuring investments to the tune of
€64.9 million, and the increase in working capital for €24.0 million
(against a decline of -€25.9 million in 2010). The WCR was €243m
on December 31, 2011, or 25% of sales, compared to €173m in
2010 (21% of sales). Measures taken in relation to organization and
productivity, and the implementation of improved logistics were not
enough to compensate for the impact of very strong growth in the
LISI AEROSPACE Division and the sudden slowdown of activity at LISI
AUTOMOTIVE at the end of the year.
Many structuring investment projects were launched in 2011 across
all divisions.
LISI AUTOMOTIVE well spent €35.6 million on these, most of which
focused on:
– the operational opening of the Delle II site (Territory of Belfort)
which represents an amount of €5.3m,
– the hardware plan for €11.9m,
– the layout of the Puiseux site (Val d'Oise) to accommodate the
activities of Bonneuil-sur-Marne (Val de Marne) for €5 million.
(1) LEAP 56™ is the technological acquisition program by CFM International, a 50/50 company held by Snecma (SAFRAN Group) and General Electric (USA).
(2) French business tax on added value.