LISI 2012 FINANCIAL REPORT
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2
Financial situation
All these measures are very important and necessary to ensure
the gradual recovery of the division's profitability, which should
be noticeable only towards the end of 2013 and 2014.
Investment efforts will continue at the same level in 2012 in
order to support all of the division's major projects and allow
the necessary improvement in performance.
2.4 LISI MEDICAL
The year 2012 was characterized by the following main events:
• Orders from new clients and new structuring projects for LISI
MEDICAL Orthopaedics with the significant strengthening of
the "Development" teams.
• LISI MEDICAL Fasteners develops new capabilities in the field
of Peek cages (spine) with promising opportunities.
• Continued repositioning of LISI MEDICAL Jeropa (USA) on the
Spine and Trauma-ends segments with many projects under
study.
• Slowdown in demand towards year end as a result of the
implementation of the Excise Tax in the United States,
resulting in difficulties in stabilizing the volumes, the context
and the customers, while the product mix is evolving
significantly.
Market
The decrease in the average annual growth of the global
orthopedics and dentistry market, about 4% in 2012 compared
to 7% in the post-crisis period, is particularly noticeable for the
last segment. The orthopedics market is still very encouraging
with the support of emerging countries.
In the last quarter of 2012, the net impact of the Obama plan
measures in the United States has been significant. The lower
reimbursements of medical expenses in Europe due to the
deficit control policy, is an additional factor that slows down
growth.
While the consolidation of outsourcing players in the medical
implants industry seems to have reached a pause in 2012, the
recovery of movements could occur as soon as their financial
situation improves.
Activity
In €m
2012
2011**
Changes
Sales revenue
64.8
74.0
-12.4%
EBIT
2.8
5.4
-48.5%
Operating cash flow
3.1
5.5
-42.6%
Net CAPEX
11.6
4.2
+179.4%
Registered employees at period end
475
508
-6.5%
Full time equivalent head count*
511
596
-14.3%
* Including temporary employees.
** The Group anticipated as at January 1, 2012 the implementation of the revised IAS 19. The 2011 statements have been restated accordingly.
Both fastener sites at Neyron and Escondido (USA) were
penalized by the decline of the dental segment without the
development of new products being able to provide the
necessary business to return to the breakeven point over the
year. Complex projects in the field of spine or trauma require
very long qualification and testing phases before LISI MEDICAL
can start enjoying significant sales revenues.
On the other hand, the site of LISI MEDICAL Orthopaedics in
Caen (Calvados) has worked a lot on the deployment of new
activities and customers. The -12.4% decline in sales revenue
is explained by the weakness of the dental segment and a
unfavorable basis of comparison with 2011 which saw LISI
MEDICAL Orthopaedics enjoy the positive accelerating effects
of the Stryker contract for €6m. Excluding this effect, the
residual drop is entirely due to the adjustment of the dental
segment. The division's output was slashed by 18% to reduce
inventories. At the same time, the division must keep intact,
and even strengthen, its capacities for business projection and
technical studies. Therefore, a full, 6-strong, development team,
was integrated into LISI MEDICAL Orthopaedics in September;
the sales force was also consolidated on the other sites. While
conducting these programs, LISI MEDICAL maintained a
satisfactory level of profitability: EBIT amounted to €2.8 million
with an operating margin of 4.3%, compared with €5.4 million
and 7.3% in 2011, respectively.
