25 / 168
The current operating profit takes into account the following operating
charges in particular:
■■
€5.5 million of extra costs identified in the “Structural Components”
activity (reduced by half from2016);
■■
€7.7 million increase in depreciation due to the investment plan.
The financial structure remains solid with operating cash flow of
€129.9 million (13.0% of sales revenues), which largely finances an
investment plan of €91.4 million. An increase of 11.0% from 2016, these
were devoted to improving the productivity of the three activities,
including:
■■
breakout technical initiatives in “Fasteners” Europe and the starting of
the last phase of the Villefranche-de-Rouergue site relocation project;
■■
the operational start-up of the Forge 2020 project in the “Forged
Integrated Solution” activity in Bologne;
■■
theincreaseinthecapacitiesdedicatedtothemanufacturingof leading
edges and the construction of the new Polish plant in the “Extrusion &
Forming activity”.
Inventoriesforthedivisiondecreasedby€9.1millionforthefinancialyear,
corresponding to a reduction of four days in sales revenue.
Taking into account these items and the good control of other working
capital requirements, Free Cash Flow reached a record level of
€+61.6 million (6.2%of sales revenues, 3.3% in 2016).
Theheadcountdecreasedoverthefinancialyearwith7,251persons(7,386
in December 2016).
OUTLOOK
Long-term trends in the aerospace market remain strong, particularly
for single-aisles (A320neo, B737MAX) and new programs (A350, B787).
In the short term, the downward adjustment of activity in “Fasteners
Europe” with significant consequences for the first part of the year will
be followed closely. The continued reduction of excess industrialization
costs and compliance with delivery programs will remain priorities in 2018
in“StructuralComponents”.Thechange inthedollar isanadditional itemof
uncertainty for the entire sector.
From an operational standpoint, the Forge 2020 project of the “Forged
Integrated Solutions” activity for the plant currently located in Bologne
(Haute-Marne) will enter the actual construction phase. The aeronautical
division is moreover continuing the modernization of its production
resources, by investing in the long-termprojects such as the development
of the “OPTIBLIND
TM
” assembly system, the implementation of the
“robotization”projectoragainthedevelopmentofLISIAEROSPACEAdditive
Manufacturing.
2.3
I
LISI AUTOMOTIVE
Summary presentation of the LISI AUTOMOTIVE activity:
■■
sales revenue of over €500million for the first time;
■■
a further rise in new product order intake and accelerated growth
internationally;
■■
fifth consecutive year of improvement in the operating margin,
reflecting the strategy to change the product mix towards more value-
added products;
■■
positive free cash flow for the second year in a row, significantly
improved compared to 2016;
■■
good visibility in financial year 2018 driven by new products and profit
on a full-year basis fromTERMAX’s contribution.
Market
Global automotive markets grew by 2.4%*. The European market is
growingmorequicklyatarateof+3.3%.TheChinesemarketexperienced
moremoderategrowthof+2.0%andtheUSmarketwasdown-1.9%while
remaining at a historically high level.
In Europe, which remains LISI AUTOMOTIVE’s main area of involvement,
growth is driven by the major markets Italy (+7.9%), Spain (+7.7%) and
France (+4.7%), while Germany (+2.7%) didworse than themarket and the
UK fell sharply (-5.7%).
Among the European manufacturers, customers of LISI AUTOMOTIVE,
Renault-Dacia (+6.6%), Daimler (+4.8%) and PSA (+4.8% excluding OPEL)
are the most dynamic. Volkswagen (+2.3%) and BMW (+0.9%) were less
dynamic than themarket.
Orders for new products taken by the division expressed in annualized
sales revenue represents 10.6% of sales revenue, i.e. about €52 million,
compared with 10.2% in 2016. Growth was particularly noteworthy in
the “Safety Mechanical Components” and “Clipped Solutions” Business
Groups, reflecting the market share gains strategy in those areas of
activity.
* Source: ACEA -
Association des Constructeurs Automobiles Européens
.
Activity
In millions of euros
2017
2016
Changes
Sales revenue
506.0
465.3
+ 8.8%
Current operating profit (EBIT)
33.3
26.3
+ 26.6%
Operating cash flow
53.6
43.8
+ 22.3%
Net CAPEX
- 37.5
- 31.9
+ 17.6%
Free Cash-Flow
1
+ 13.1
+ 7.9
€+5.2 million
Registered employees at period end
3,773
3,265
+ 15.6%
Average full time equivalent headcount
2
3,522
3,368
+ 4.6%
1
Free Cash Flow: operating cash flowminus net capital expenditure and changes in working capital requirements.
2
Including temporary workers.
25
LISI 2017 FINANCIAL REPORT
FINANCIAL SITUATION
2