LISI GROUP - 2018 Financial report

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Change in reported sales revenue by quarter (€ million)
Q1 Q2 Q3 Q4 Total
2017 2018 2017 2018 2017 2018 2017 2018 2017 2018
LISI AEROSPACE 277.5 235.6 258.3 230.1 222.6 221.4 242.4 246.9 1,000.9 934.0
LISI AUTOMOTIVE 128.9 153.9 123.7 152.1 116.2 131.1 137.3 144.0 506.0 581.1
LISI MEDICAL 37.9 30.2 35.6 33.6 31.1 34.0 32.5 32.9 137.0 130.7
LISI Consolidated 444.3 419.5 417.4 415.6 369.7 386.3 412.0 423.7 1,643.4 1,645.1
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Total 2018
∆ reported ∆ organic ∆ reported ∆ organic ∆ reported ∆ organic ∆ reported ∆ organic ∆ reported ∆ organic
LISI AEROSPACE -15,1% -8,1% -10,9% -7,7% -0,6% -1,4% 1,9% 0,0% -6,7% -4,6%
LISI AUTOMOTIVE 19,4% 5,6% 23,0% 8,2% 12,8% -2,8% 4,9% -6,8% 14,8% 0,9%
LISI MEDICAL -20,3% -14,9% -5,5% -2,8% 9,3% 9,0% 1,5% -0,4% -4,6% -2,9%
LISI Consolidated -5,6% -4,4% -0,4% -2,6% 4,5% -1,0% 2,8% -2,3% 0,1% -2,6%
Fourth quarter activity
Compared to the same period during the previous year, fourth quarter
2018 sales revenue decreased by -2.3%at constant scope and exchange
rates. This difference is due to the steep drop in business in the
LISI AUTOMOTIVE division, whereas LISI AEROSPACE continued its
recoveryandendedtheyearatthesamelevelasin2017.Theconsolidation
of Hi-Vol effective October 1, 2018 contributed €10.3 million in additional
sales revenue.
The foreign exchange effect reverted to positive in the fourth quarter at
+€5.6 million.
Analysis by division
LISI AEROSPACE sales revenue totaled €934.0 million in 2018 (-6.7%
compared to 2017). The dollar effect remained unfavorable for the year,
even if it reverted to being positive during the second half of the year.
Alldivisionactivitiessawsteadyimprovementinsaleswithfourthquarter
growth up by 1.9% compared to 2017. In Europe, the “Fasteners” activity
is still weighed down by the effects of adjustments in the supply chain of
its main European aircraft manufacturer customer. This issue seems to
have reached its nadir during the second half of the year. The “Fasteners”
activity in theUnitedStates experienced a clear recovery during the year
(Q4: +16.0%) supported by the market shares gained over the past few
years with Boeing, and by the recovery in business and regional aircraft,
helicopters,anddefense.The“StructuralComponents”activitycontinued
todisplaygoodmomentumduringtheentireyear(Q4:+6.2%),particularly
thanks to the continued increase in the pace of new programs, including
for the LEAP engine. At constant scope and exchange rates, the
LISI AEROSPACE Division achieved the same results in Q4 2018 as in Q4
2017. This resulted in a better start to 2019 than 2018.
The LISI AUTOMOTIVE division’s sales revenue grew by +14.8% to
€581.1 million. This is the result of the division’s continued international
development (Termax consolidated since November 1, 2017 and Hi-Vol
since October 1, 2018) and the significant ramp-up in new products for
the “Clipped Solutions” and “Safety Mechanical Components” segments.
The optimism generated by good performance was nevertheless
dampened by the entry into effect of a new approval procedure for
vehicles on September 1: the Worldwide harmonized Light vehicles Test
Procedures (WLTP‑Euro 6), which is more stringent regarding the
discharge of pollutants. Several manufacturers therefore had to stop or
delay the sale of certain models that no longer met the requirements,
while they adapted their engines. The downturn in the Chinese market
during the second half of the year also pushed the division’s sales down.
At constant scope and exchange rates, sales revenue grew by +0.9%,
translating newgains inmarket shares in a contextwhere theproduction
ofLISIAUTOMOTIVE’smaincustomersdroppedby-2.6%comparedtothe
prior financial year. However, this slight increase in sales revenue is the
result of two extremely volatile half-year periods: the first half was very
active at +6.8%and requiredtheuseofovertimeand temporaryworkers,
while the second half of the year registered a significant downturn in this
activity (-4.9%), which became even more pronounced during the fourth
quarter (-6.8%).
The LISI MEDICAL division benefited from the gradual ramp-up in new
products gained in the field of minimally‑invasive surgery and
orthopedics.Althoughthedivisionrecordedgrowthbetweenthefirstand
second halves of the year, sales revenue for the year still remained down
by-4.6%dueto itsmaincustomerdeferringsomeordersattheendofthe
financial year.