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LETTER FROM THE MANAGEMENT
A YEAR MARKED
BY INCREASED
ECONOMIC VOLATILITY
D
riven by the noticeable volatility of
its markets, the Group’s stock did not
do well over the year. First, there was
significant adjustment of aerospace
demand in Europe. Then, the second
half of the year saw a significant drop
in automotive markets. Thanks to
the acquisitions made in the United
States and the rise of the dollar toward the end of the
period, the Group’s sales stood at € 1.64 billion, stable
(+0.1%) compared to the previous year, and down -2.6%
on a constant scope and exchange rate basis.
Such volatility in sales weighed heavily on the LISI Group’s
results with, in particular, a -21% decline in EBIT and
ROCE (Return On Capital Employed) undergoing pressure
at 10.6%, down -3.7 points. In this respect, both afore-
mentioned striking economic factors were particularly
difficult to handle:
• The drop in inventories, combined with a structural
change in demand from a major customer in the
European aerospace industry, created a situation of
under-activity at several industrial sites.
• In the Automotive Division, the overheating of the first
half of the year and the fall in activity since September
2018 resulted in both of these extra costs being
impossible to absorb in full during the period.
The Group responded by taking appropriate action
to adjust its costs to the new market conditions,
particularly in the aerospace sector, to develop its most
efficient production areas and to position itself on high
value-added products, with in particular the acquisition
of Hi-Vol Products in the United States. The contribution
of the acquisition of Termax (United States) in 2017 was
particularly beneficial for the continued contribution of
the Automotive Division.
However, production adjustments initiated towards the
year end were not sufficient to avoid a slight increase in
inventories.
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