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LISI 2016 FINANCIAL REPORT
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Activity
(in millions of euros)
2016
2015
Changes
Sales revenue
987.2
929.6
+6.2%
Current operating profit (EBIT)
122.9
124.3
(1.1%)
Operating cash flow
127.1
113.9
+11.5%
Net CAPEX
(82.4)
(69.0)
+19.4%
Free Cash Flow
1
32.3
41.7
(€9.4 M)
Registered employees at period end
7,386
7,087
+4.2%
Average full time equivalent headcount
2
8,011
7,614
+5.2%
1
Free Cash Flow: operating cash flow minus net capital expenditure and changes in working capital requirements.
2
Including temporary workers.
LISI AEROSPACE continues to show dynamism with sales revenue
increasing by 6.2% to €987.2 million.
The retroactive consolidation at January 1, 2016 of the Indian company
Ankit Fasteners contributed +€5.2 million to the division’s sales revenue.
Furthermore, the net currency effects amounted to –€1.4 million.
At comparable scope and currency, growth of 5.9%, sustained by a very
dynamic European market and a strong build-up of the new programs.
The “Fasteners – Europe” activity which benefited from the initial
allocations from the A350 program (which corresponds to the
constitution of the assembly line inventories prior to the long
production run industrialization phase) is increasing by +14.3%. The
“Fasteners North America” part saw an upturn in orders from Boeing
during the last months of 2016, an initial improvement after several
months of substantial decreases in sales revenue (€20 million) due to
the re-organization of the aircraft manufacturer’s supply chain. The
“Structural components” activity, whose products are primarily intended
for European customers, also saw good growth of +7.0%, also driven by
the build-up of the new programs (A350, engine LEAP, etc.).
Results
The current operating profit reached €122.9 million (€124.3 million in
2015). At +12.4%, the operating margin declined by 1 point compared
to 2015.
However, the operation of the sites for the “Fasteners” activity
benefited not only from the favorable volume effect in Europe, but
also from productivity gains generated thanks to the implementation
of the LEAP program (LISI Excellence Achievement Program). On
the other hand, the improvement in the operating situation of the
“Structural components” activity is still slowed down by the industrial
difficulties in the new program’s strong build-up phase.
The current operating profit takes into account the following operating
charges in particular:
–
–
€12.0 million of extra costs identified in the “Structural components”
activity;
–
–
€3.9 million increase in depreciation due to the investment plan;
–
–
€2.3 million costs related to the development of the new programs.
The financial structure was strengthened by the good level of operating
cash flow (12.9% of sales revenue) at €127.1 million which largely
finances a record investment plan of +€82.4 million. An increase
of nearly 19% compared to 2015, these investments were mainly
devoted to:
–
–
the “Fasteners – Europe” activity particularly with the industrial
reorganization of several major sites at Villefranche-de-Rouergue,
Rugby (UK) and Saint-Ouen l’Aumône,
–
–
the scope of LISI AEROSPACE Creuzet (development of new
products, in particular in Marmande),
–
–
the continuation of the modernization plan for Manoir Aerospace.
Inventories for the division decreased by €5.0 million for the financial
year, corresponding to a reduction of 8 days in sales revenue.
Taking into account these elements and the good mastery of other
working capital requirements, the free cash flow remains largely
positive at +€32.3 million (3.3% of sales revenue).
The headcount increased over the financial year with 7,386 persons
(7,087 in December 2015).
The sale of the “Floor covering - Interior design” activity (sales revenue
of €8 million in 2015) was effective on August 1, and the sale of
Précimétal Fonderie de Précision was finalized on February 2, 2017
(€14.6 million of sales revenue in 2016).
OUTLOOK
Visibility in the commercial aircraft sector remains robust, in
particular with regard to the single-aisles and the new programs
(A350, B787, etc.). Confirmation of the upturn in the Boeing order
books still requires monitoring. This should make it possible to offset
the probable slow down in the “Fasteners – Europe” activity following
the peak caused by the initial allocation of the Airbus A350 program.
The other market segments served by LISI AEROSPACE experienced
difficulties. This is particularly the case of helicopters, certain
segments such as military and business aircraft in the USA as well
as regional aircraft.
Even if the build ups have already been anticipated, the ambitious
industrialization programs undertaken since 2016 have still to
succeed. The costs, always significant, of non-quality and the
industrialization of very complex technical parts specific to the new
Airbus and Safran programs on various sites should be gradually
brought down during the next quarters.
FINANCIAL SITuaTION
2