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FINANCIAL SITUATION

28

LISI 2015 FINANCIAL REPORT

products should, however, allow the division to continue its

organic growth dynamic.

For the financial year 2016, LISI AUTOMOTIVE has set itself

the objective of continuing the progress recorded over the last

three years, in particular that provided by the implementation

of the LEAP (LISI Excellence Achievement Program) plan, and

to continue to sustainably improve its operational profitability.

The division should be able to build on the reorganization

efforts undertaken since 2012. After four years of intensive

efforts, the performance of the "Threaded Fasteners France"

sites should now recover and profit fully from the industrial

gains.

The investment plan will be less ambitious in 2016, which

should generate a surplus of free cash flow.

2.4

/

LISI MEDICAL

■■

Market rather dynamic

■■

New improvement to the operating margin

■■

Return to a positive Free Cash Flow, despite continuing

significant investments

Market

Over the last two financial years, the world orthopedics market

has returned to growth in line with the long-term trend (+4%

to +5% per year). LISI MEDICAL considers that the contractual

manufacturing segment, in which it operates from its three

production sites, has increased faster, allowing it to consolidate

inventories and orders in the sector.

However, implant prices are still a concern for final users with

a continuous increase in quality demands.

LISI MEDICAL's customers respond to market constraints

by consolidating their portfolio of activities with innovative

approaches.

Highlights

■■

Good level of orders and activity with existing customers and

new customers in orthopedics (€3.0 M)

■■

Tangible improvement of the management indicators for all

sites

Sales revenue amounted to €74.8 million, an increase of +5.2%,

of which part is due to the dollar effect (+2.0%) with a good level

of activity over the last quarter at €18.6 million. Production

was pushed to €75.3 million (+7.0%) with the aim of increasing

inventories of products under contract and improving the

service level to customers.

Activity

In millions of euros

2015

2014

Changes

Sales revenue

74.8

71.1

+5.2%

Current operating profit (EBIT)

4.1

3.5

+16.8%

Operating cash flow

5.3

3.5

+51.0%

Net CAPEX

(4.0)

(4.6)

-12.2%

Free cash flow

1

1.7

(1.0)

+€2.7M

Registered employees at period end

573

538

+6.5%

Average full time equivalent headcount

2

623

597

+4.4%

1 Free cash flow: operating cash flow minus net industrial CAPEX and changes in working capital requirements.

2 Including temporary employees

Commercially, order taking is at a reasonable level, before the

ramp-up of generic products and projects under development.

Supported by the volume effect which allows better coverage

of fixed costs, the operating margin improved again to reach

5.5% (4.9% in 2014). All sites progressed, in particular in the

USA where sales revenue increased by 41% in euros. Quality,

productivity and consumption indicators are managed, despite

the dollar effect on the price of raw materials, jolts in demand

and the increased flexibility demanded by major customers.