Universal Registration Document 2019

28 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 Taking all these items into account, Free Cash Flow reached the record level of €85.7 million (8.6% of the Division’s sales revenue). Headcountwasdowncompared to2018with6,590employees at December 31, 2019 compared to 7,214 in 2018, a drop of 8.6%. Following restatement of the removal from the scope of consolidation of Indraero Siren and LISI AEROSPACE Creuzet Maroc, the registered headcount at year-endwas up 1.1% (for a production increase of 7.3%). Outlook The LISI AEROSPACE Division has already implemented measures to adapt its B737MAX dedicated capacity, improve its efforts to develop newproducts and acquiremarket shares, particularly in the United States. LISI AEROSPACE’s status as a leading supplier has been boosted both by the renewal of its current contract to supply fasteners to AIRBUS until 2026, and the new major new 10-year contract that in won with MTU Aero Engines in December 2019 to supply GTF engine compressor blades. Buoyed by the momentum of its various activities, LISI AEROSPACE begins 2020with confidence in its long-term development model, which remains unaffected by current uncertainty regarding the schedule and the potential return to service of the B737 MAX. (1) Source: ACEA Association des constructeurs Automobiles Européens. (2) NAFTA: North American Free Trade Agreement (Canada, United States and Mexico). LISI AUTOMOTIVE ■ Growth of nearly 1.2% in reported sales revenue to €587.9 million, supported by the scope effect (on a full-year basis) of the acquisition of US company Hi-Vol in 2018; ■ New market share gains in Clipped Solutions and Safety Mechanical Components; ■ Steady improvement of the operating margin between the first and second quarters reflecting the gradual impact of the cost-cutting measures launched in the fourth quarter of 2018; ■ Record annual Free Cash Flow of €19.5 million; ■ LISI AUTOMOTIVE Former sells the Saint-Florent-sur-Cher screws, chassis studs and joints business (sales revenue of €31.8 million in 2019). Market Worldwide automotive markets recorded a moderate drop of 1.6% in the fourth quarter, (1) cushioned by the European market (up 11.2%). The European market benefited from a favorable basis for comparison in relation to 2018, which was hit by the impacts of the newWTLP anti-pollution standards. Over the full year, there was a steeper decline in the global market, which fell from -0.5% in 2018 to -4.4% in 2019, while the European market returned to positive growth (up 1.2%). The drop in the Chinese market (down 8.3% in 2019) masked a move back into steady growth in the fourth quarter. In the NAFTA region (2) , the fourth quarter was down 2.7%, in line with previous quarters. 2019 recorded a 2.0% drop. Activity In millions of euros 2019 2018 Changes Sales revenue 587.9 581.1 +1.2% Current operating profit (EBIT) 21.9 34.0 -35.6% Operating cash flow 49.0 57.6 -15.1% Net CAPEX -37.3 -43.6 -14.4% free cash flow 19.5 4.1 +15.4 M€ Registered employees at period end 3,634 3,931 -7.6% Average full-time equivalent headcount** 3,954 4,067 -2.8% * Free Cash Flow: operating cash flow minus net capital expenditure and changes in working capital requirements. ** including temporary workers The LISI AUTOMOTIVE division’s sales revenue grewby +1.2% to €587.9 million. This growth is linked to its international development (Hi-Vol in the USA consolidated since November 1, 2018). At constant scope and exchange rate, the sales revenuewas down 3.3% (down 1.2% in Q4). The Division is therefore faring better than its main customers, whose production fell by an estimated 7.4% compared to the previous year. Over recent years, it is high added value activities such as Clipped Solutions and Safety Mechanical Components which have proven to be the most resilient. These activities have been able to increase delivery of new products and acquire greater market shares. Emerging synergies between American company Termax and long-standing Clipped Solutions sites have also boosted sales revenue. The activity most impacted by lower volumes is Threaded Fasteners, both in France and Germany.