LISI GROUP - 2018 Financial report

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2 IGroup activity during the financial year and future outlook
Declaration of Extra-Financial Performance (Art. R 225‑105 of the French Commercial Code)
(1) Free Cash Flow: operating cash flowminus net capital expenditure and changes in working capital requirements.
(2) The change at constant scope and exchange rates or organic growth is calculated:
• by converting into euros the sales revenue of the companies whose financial statements are denominated in foreign currencies at the average rate of the year N-1
or themonth M-1;
• by converting into euros the sales revenue invoiced in currencies other than the local currencies at the average rate of the year N-1 or themonth M-1;
• by restating the entries into or exits from the scope in order to once again find a comparable basis.
The Consolidated Declaration of Non-Financial Performance (DPEF) for
the year ended December 31, 2018 is presented in this chapter of the
Management Report pursuant to the legal and regulatory provisions of
Articles R. 225‑105 of the French Commercial Code.
Information related to the DPEF is presented in various chapters of
the Annual Report, as indicated in the following correlation table:
DPEF items stipulated by Article R. 225‑105 I
of the French Commercial Code
DPEF Declaration
of the LISI Group
Presentation of the entity’s business model Chapter 1 General information regarding the Company
Chapter 2 Financial situation
Description of the main risks associated with the entity’s business,
incorporating the social and environmental spheres, and where applicable,
therespectofhumanrightsandthefightagainstcorruptionandtaxevasion,
and includingany itemsthatmayproverelevantorappropriate,andtherisks
generated by its business relations, products or services.
Chapter 5 Risk factors
Chapter 6 Corporate Social Responsibility
Descriptionofthepoliciesappliedbytheentity including,whereapplicable,
the reasonable due diligence measures implemented to prevent, identify
and mitigate the occurrence of these risks.
Description of the results of these policies, including the key performance
indicators.
Information regarding the consequences of climate change on the
Company’s business and the use of the goods and services it produces, its
societal commitments to sustainable development, the circular economy,
the fight against foodwaste and food insecurity, the respect of animal well-
being and responsible, fair and sustainable ways of eating, the collective
agreements signed within the Company and their impacts on its economic
performance as well as on the working conditions of employees, actions
aimed at fighting discrimination and promoting diversity and measures
implemented for disabled persons.
Presentation of data from the previous year, when the entity was subject to
the DPEF during the preceding financial year. Mention of the national or
international reference document if the entity voluntarily complies with it.
Recommendations of said reference as well as methods used to consult it.
Chapter 6 Corporate Social Responsibility
1. LISI is a Member of the UN Gobal Compact Program
2. LISI Group values
3. Organization and governance
4. Methods used by LISI in shaping its CSR approach
5. LISI’s strategic challenges
6. Human Resources
7. Health, Safety and Environment
8. Responsible purchasing
9. Product safety and security
10.Anti-corruption efforts
Scope and Exclusions
2.1 ILISI Consolidated
■■Sales revenue reached €1,645.1 million, stable when compared to 2017
(+0.1%);
■■Current operating profit dropped by nearly 21%;
■■Free Cash Flow(1) was largely positive at €57.3 million, and improved
when compared to 2017 due to the high CAPEX level over the past few
years;
■■Based on an encouraging 2018 year-end and assuming stability in its
main markets, the Group’s objectives for 2019 are to return to positive
organic growth, surpass its 2018 financial performance, and generate
largely positive Free Cash Flow.
Comments regarding business
At €1,645.1 million consolidated sales for the 2018 financial year were up
0.1% and include the following items:
■■a scope effect of €70.0million corresponding to:
• • +€61.2 million incremental contribution of the American company
Termax since November 1, 2017;
• • +€10.3millionfromtheconsolidationoftheUScompanyHi-Volwithin
LISI AUTOMOTIVE effective fromOctober1, 2018;
• • -€1.5 million reflecting the disposal of Précimétal Fonderie de
Précision (Belgium) on February 2, 2017.
■■an adverse foreign exchange effect of -€21.2million.
Accordingly, at constant scope and exchange rates(2) , sales revenue
decreased by -€47.1 million, i.e. -2.6%compared to 2017.