Universal Registration Document 2019

25 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 Breakdown of 2019 sales revenue Breakdown of 2018 sales revenue LISIAEROSPACE LISIAUTOMOTIVE LISIMEDICAL 8% 34% 58% LISIAEROSPACE LISIAUTOMOTIVE LISIMEDICAL 8% 35% 57% Headcount at the end of December As at December 31, 2019, the LISI Group employed 11,171 employees (registered headcount), a 960 decrease of the total workforce (down 7.9%) compared with 2018. Restatement of the removal from the scope of consolidation of Indraero Siren, LISI AEROSPACE Creuzet Maroc and Saint‑Florent-sur-Cher. The registered headcount at year-end was therefore down by 88 people (down 0.7%). Registered headcount 2019 2018 DIFFERENCE N/N-1 LISI AEROSPACE 6,590 7,214 -624 -8.6% LISI AUTOMOTIVE 3,634 3,931 -297 -7.6% LISI MEDICAL 919 959 -40 -4.2% LISI HOLDING 28 27 +1 +3.7% GROUP TOTAL (excluding temporary workers) 11,171 12,131 -960 7.9% Temporary workers 621 746 2019 Results Current operating profit was up 14.4%. The operating margin gained 0.8 points, ending the year at 9.0%. EBITDA was up 21.2% to €273.2 million (i.e. 15.8% of sales revenue). All division activities saw steady improvement in sales between the first and the second half-year, which is due to the following factors: ■ In Europe, the LISI AEROSPACE Fasteners activity benefited from increased volumes due to the production initiatives implemented in 2018. The Structural Components activity saw a continued ramp-up of its LEAP-1A engine programs throughout the year. This entirely offset the fall in production of the LEAP-1B engine, ■ The performance of the LISI AUTOMOTIVE Division reflects the initial effects of the cost adjustment measures launched in the fourth quarter of 2018, ■ The LISI MEDICAL Division demonstrated its ability to better manage industrialization costs during the ramp-up of new products in the field of minimally-invasive surgery. Depreciation increased by €20.0 million due to significant capital expenditures over the last few years, as well as the €12.3 million IFRS 16 impact. Reversals of provisions completed to offset operating expenses of the same type decreased by €8.1 million. Current operating profit increased by €19.5 million (14.4%) to €155.1 million. At 9.0%, the operating margin was up 0.8 points on 2018. The strongly negative impact of the financial result (-€8.5 million) compared to 2018 (+€5.3 million) can be explained by the following main items: ■ the revaluation of debts and receivables denominatedmainly in US dollars (-€0.5 million, compared to +€12.7 million in 2018); ■ the negative impact of the fair value of hedging instruments involving currencies (-€3.3million compared to +€4.1million in 2018), ■ greater financial expenses linked to the cost of net debt. They rose to -€7.6 million (-€5.9 million in 2018). They are lower than 2018 following restatement of the IFRS 16 impact of -€2.1 million. ■ The average interest rate is 2.2% (2.1% excluding IFRS 16). Gains on current cash investments totaled +€3.2 million, compared to +€3.3million in 2018. Net financial expenses in proportion to net financial debt therefore represents less than 1%. Non-current expenses caused the net earnings to drop by €44.8 million (compared with a fall of €10.8 million in 2018). The majority of this drop (- €40.5 million) is due to the removal of Indraero Siren (Argenton-sur-Creuse), LISI AEROSPACE Creuzet Maroc and Saint-Florent-sur-Cher (LISI AUTOMOTIVE Division) from the scope of consolidation. The tax expense, calculated on the basis of the corporate tax as a percentage of the net income before taxes, reflects an effective average rate of tax of 27.4%, up compared with the 2018 figure of 25.9%. The net earnings amounted to €69.8million, down 24.2% from €92.1 million in 2018. Following restatement for the impacts of the removal of Indraero Siren (Argenton-sur-Creuse),