Financial situation
1
2
LISI 2014FINANCIALREPORT
I
25
Activity
In€M
2014
%Group
2013
Changes
Sales revenue
788.1
60%
663.9
+18.7%
EBIT
114.1
87%
118.2
-3.5%
Operatingcash flow
106.2
75%
107.5
-1.2%
NetCAPEX
-51.3
57%
-52.3
-1.9%
FreeCashFlow
1
43.9
96%
32.6
+34.7%
Registeredemployeesatperiodend
6,957
65%
5,604
+24.1%
Full timeequivalentheadcount
2
6,800
63%
5,951
+14.3%
1FreeCashFlow:operatingcash flowminusnet industrialCAPEXandchanges inworkingcapital requirements.
2 Includingtemporaryemployees
Highlights
Mainly specializing in the forging of metal parts for aerospace
applications, theManoir Aerospacehas been consolidated since June 5,
2014 into LISI AEROSPACEwith the aimof strengthening the Structural
Componentsarmwiththe integrationofcomplementarytechnologies.
This acquisition, which represents a major step in the development
of the LISI Group, contributed €94.8M (about 7months of activity) to
sales of €788.1M posted by the Aerospace division in 2014. At €256M,
the Structural components activity now accounts for almost a third.
Thedivision thuspostsan increaseof 18.7%of its sales; adjusted for the
acquisition of Manoir Aerospace and currency effects, organic growth
was + 4.3% for the full year (+ 9.0% in the fourth quarter 2014). This
development is in linewith the slowdown that was expected after the
exceptionallyhighgrowthraterecordedsince2011.
In particular, sales by the Fasteners segment took a break in Europe
(+0.5%),whiletheAmericanzone ismoredynamic (+5.1%).
Conversely, the Structural components have benefited from the
development of new products, which allows them to display a sales
increaseof+5.7%overtheentireyear.
Current operating profit was €114.1M (€118.2M in 2013).The temporary
drop in calls for fasteners on the A350 program, which does not fully
offset the sustained activity of Boeing, and the industrialization costs
of new structural components, as well as the integration of Manoir
Aerospace,haveweighedonthemargin,whichisdown3.3pointsat14.5%
(versus17.8% in2013).
Inventories rose from€192.8M to€253.8Mdue to the consolidationof
Manoir Aerospace for €55.9M. Expressed as anumber of days of sales,
they were stable at about 107 days. TheWorking Capital increased by
+€9.3M, restatedwith theWorkingCapital ofManoir Aerospace. After
CAPEX recorded for€53.1M, up slightly compared to2013, thedivision's
FreeCashFlowwasoverwhelminglypositive:at€43.9M,or5.6%ofsales,
it increasedbymorethan€10M fromthepreviousyear.
CAPEXremainedhigh:theyaccountforabout€55.6Mrecorded,ofwhich
60% spent on the Fasteners Europe activity (newplant inVillefranche-
de-Rouergue), while Structural components have sustained significant
expendituresonnewproducts (formingandmachiningequipment).
Theworkforce stoodat 6,800 FTEs (versus 5,951 in2013), including 1,341
averageFTEs inDecemberforManoirAerospace.Onaconstantbasis,the
increasebyahundredFTEswasmainlyduetotheStructuralcomponents
activity.
OUTLOOK
Thedivisionasawholewillbenefit fromamarketenvironment thatwill
remain strong, yetwill be very demanding in terms of industrialization
paceandramp-upofnewproducts.
Regarding fasteners sales, this year LISI AEROSPACEwill have to renew
thecontractwith itsmaincustomerAirbus fortheperiod2015-2020and,
intheUnitedStates,willneedtobesuccessful indevelopingdistribution.
Onthe industrialside,thetransferofthe iconicVillefranche-de-Rouergue
plant, of theMonadnock site (Cityof Industry) and theextensionof the
Saint-Ouen-l'Aumône plant, willmark anewmilestone in the quest for
industrial excellence. Located in countrieswith lower production costs,
thesitesof Izmir,TangiersandBangaloreareexpectedtorampup.
ThededicatedStructural componentsarm iswhere themost significant
industrial challenges are to be expected, particularlywith the planned
speedup of two major programs for LISI AEROSPACE: the CFM Leap
engine and the best-selling Airbus A350. Both projects concern both
theplantsatMarmande (Creuzet) than thoseatBologneandParthenay
(Manoir Aerospace). Thesedevelopmentswill continue toweighon the
segment'sprofitabilityin2015beforeimprovinggradually.Inthemedium
term, the division is engaged in a heavy industrial modernization
program forallManoirAerospacesites.
