Universal Registration Document 2019

30 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 As expected, the LISI MEDICAL Division benefited from the gradual ramp-up in new products gained in the field of minimally-invasive surgery, and from a favorable foreign exchange effect. These factors offset the slowdown in activity on the Division’s two smaller sites, LISI MEDICAL Fasteners (Neyron, France) and LISI MEDICAL Jeropa (United States), as well as a sharp fall in the dental sector. The major contract between LISI MEDICAL and Stryker Corp was renewed for three years. The sales revenue for the year therefore rose by 11.9% (a 13.6% rise in Q4) to €146.2 million, representing growth of 8.8% at constant scope and exchange rates. Results The operating profit reached €7.2 million, up 28.5% on 2018. The recovery of LISI MEDICAL Remmele and the strong performance of LISI MEDICAL Orthopaedics broadly offset the impact of any reduction in activity on the small sites (LISI MEDICAL Fasteners in Neyron, France and LISI MEDICAL Jeropa in the United States). The operating margin stood at 4.9%, up 0.6 points on 2018, and improved steadily between the first and second half-years (3.5% in H1 and 6.4% in H2). Totaling €10.8 million, CAPEX levels remained sufficient to accelerate the acquisition of equipment intended primarily for developments and the ramp-up of newproducts. CAPEXwas financed by an adequate level of operating cash flow (+€16.2 million, 11.1% of sales revenue). Inventories saw a steep fall to under 13 days. Free Cash Flow therefore returned to growth at €3.0million, up €3.7million on 2018. Outlook Although LISI MEDICAL’s minimally invasive surgery activity showed signs of improvement in 2019, the Division must continue to adapt the cost structures of its two small production sites. Its current strategic initiatives are boosted by its positive relationships with major customers.