Universal Registration Document 2019

60 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Consolidated financial statements 2 3.5.4  /  Payroll costs (in thousands of euros) LISI AEROSPACE LISI AUTOMOTIVE LISI MEDICAL Other Total 2019 Total 2018 Temporary workers 21,028 7,329 2,333 51 30,741 36,821 Salaries and incentives 247,985 141,834 48,598 2,990 441,407 433,893 Layoff pay 2,068 897 416 3 3,384 3,753 Social contributions and taxes on salaries 90,887 50,099 18,058 1,811 160,855 161,893 Employee profit-sharing 4,612 (17) 240 0 4,835 2,025 Pensions and long-service medals 1,126 857 134 0 2,117 1,664 TOTAL PAYROLL EXPENSES 367,706 200,999 69,779 4,855 643,338 640,048 3.5.5  /  Research and development expenses Research costs incurred in order to develop scientific knowledge and understanding, or to learn new techniques, are recognized as an expense when they are incurred. Under the IFRS framework, development costs (i.e. costs incurred by applying the results of research to a plan or model in order to develop new or substantially improved products and processes) are recorded as fixed assets if the Group can demonstrate that future economic benefits are probable. The LISI Group’s mission is to carry out intensive research and development activities, to develop new products, the use of newmaterials and to develop innovative production processes. This research and development activity is carried out at various levels: either as part of a co-operative venture between research and design departments within our own divisions and those of our customers, or to develop or improve certain components or industrial processes. The LISI Group’s development costs primarily relate mainly to products which are being developed through very close collaboration with customers, rather than to improvements in processes. As a result, most of the expenses incurred do not meet the criteria for capitalization as fixed assets and are therefore recorded as expenses. They consist mainly of expenses for personnel working in the R&D. Staff directly dedicated to R&D represented in 2019 some 2,4% of the Group’s employees. The Group carries out regular assessments of major projects in order to identify any costs which could be capitalized. The expenses incurred for the two last financial years are shown in the table below: In millions of euros 2019 2018 Research and Development expenditures 31.3 30.9 % of sales revenues 1.8% 1.9% Activated projects 2.9 2.0 3.5.6  /  Non-recurring operating expenses and revenues Non-recurring operating expenses and revenues break down as follows: (in thousands of euros) 12/31/2019 12/31/2018 NON-RECURRING OPERATING EXPENSES Sale of Indraero Siren and LISI AEROSPACE Creuzet Maroc (24,756) Sale of the Saint‑Florent (LISI AUTOMOTIVE Division) site (15,723) Industrial reorganization costs (4,446) (4,768) Other costs (477) (1,030) Reserve allowance for industrial reorganizations (956) (7,476) Beteo disposal (419) TOTAL (46,358) (13,693) NON-RECURRING OPERATING REVENUES Industrial reorganization plan provision reversals 1,523 3,427 Other revenues 0 TOTAL 1,523 3,427 NON-RECURRING OPERATING EXPENSES AND REVENUES (44,835) (10,266)