22
I LISI FINANCIALREPORT2013
FINANCIALSITUATION
2
Consolidated sales revenues were up at a solid rate of 12.2%, with
howeveraslowdown inthesecondhalf-year (up7.6%, including+5.2% in
Q4).Thetwoactivitiesofthedivisionscontributedsimilarlytothegrowth:
n
sales of "Aerospace Fasteners" reached €511m under the impetus of
stronggrowth at Boeing and the enginemanufacturers, whileAirbus
settledatahigh levelbytheendofthe financialyear,
n
sales of "Structural Components" came to €153m and were mainly
motoredbythebusiness inprimarycomponentsforAirbusandSafran.
ForLISIAEROSPACEFastenersorder taking isslightlydownascompared
with the record in2012,which is reflected in thebook-to-bill ratioof just
under 1.The "structures"and "engines"applicationswerestrongest in the
US. This situationhas resulted in the expected end of the initialization
phaseof theA350assembly line,while the strengtheningof theBoeing
contractcontinues.
At the operational level the organization of the "Aerospace Fasteners"
business has been optimized at all manufacturing locations except for
Torrance (USA). Today the "Structural Components" business holds the
largestpotential forprofitability.
Management of this new development phase, with favorable volume
effects for the third consecutive year and productivity increases, have
beenwell absorbed, which has translated into a new improvement in
financial performance: EBIT was thus up 2.4 points to 17.8% (15.4% in
2012).
It should be noted that non-current expenses of €5.5m linked to
reorganizationprojects intheRacingsegment intheUSAhaveledtonon-
recurringamortizationof intangibleassets.
With cash flowupalmost €20mat €107.5m, thedivisionwaseasilyable
to finance the investmentsundertakenand recognizedat€52.3maswell
as the increase in inventories,whichwerenonethelessdown in termsof
salesdays.
Themain investmentprojectsarebrokendownas follows:
n
Strengthening industrial facilities in Europe and expanding the Izmir
site inTurkey (€20.1m).
n
Starting up the new surface treatment line in theUSA and the large
diameterTitaniumcell inCanada (€16.7m).
n
Developmentofnewproducts in the "structural components"division
(€8.9m).
Atover€32m,FreeCashFlowremainsatagood level.
OUTLOOK
Following several consecutive financial years of strong growth,
improvement inperformanceand investments, 2014 isexpected tobea
yearofconsolidation.
North American business ought to continue to benefit from Boeing's
strengthsandought to increasewith twomajor products: theB737at a
rateof42aircraftpermonthovertheyear,andtheB787withthegradual
accelerationof its industrialstage.
Takeoff of volumes for theprogramsof theA350, A320Neo, Leap 1A, 1B
and Silvercrest - the new generation of engines developed by Snecma
for business planes - ought tohaveapositive impact on the "Structural
Components"business.TheMoroccofactorywillalsocontributetodirect
deliveriestocustomers located inthesamegeographicarea.
LISI AEROSPACE expects to offset the expected downturn in demand
for fasteners for theA350by an increase in volumes in theUSA andby
growth in the "Structural Components" segment. In terms of quality,
the LEAP program ("LISI Excellence Achievement Program") has
been implemented in all the manufacturing units with the expected
productivity gains. The reorganization of theNorthAmerican logistics
platformoughttonoticeably improveworkingcapital requirements.
Accordingly,wewillhavetowaituntil2015toseeadditional,newgrowth
areascrystallize,whichwillcontinuethegrowthachieved inrecentyears.
2.3
|
LISI AUTOMOTIVE
n
Aggressivesalespositionsonagrowingworldmarket, thoughdifficult
inEurope.
n
Noticeable,general recovery.
n
Full effect of the large-scale industrial program undertaken in 2013
expected fromtheendof2014.
Market
If structurally theworldautomotivemarket continues togrow (+3.9%)
1
,
itwasmost impacted inEurope, especiallyat thebeginningof the2013
financial year,witha first quarter down 10%
1
tobeat -1.8%
1
at the year
end. Global production has reached 84.2 million vehicles. French car
manufacturers posted a drop of 3.4%, while there German opposite
numbers increasedby8%.Europeanproduction levelsdropped0.7%but
almost5% forLISIAUTOMOTIVE'stwoFrenchcustomers.
