Over the last two financial years, 2009 and 2010, never in LISI’s history have the aerospace and automotive cycles been so sharply contrasted.
The crisis that took place in October 2008 crashed the automotive markets. By autumn 2009 business had significantly recovered, under the effect of the support measures taken by most governments, just as the aerospace sector encountered its first problems. Together with traditional, classic moves to reduce inventories through the supply chain, this crisis was aggravated by persistent problems that aerospace manufacturers were encountering in their new programs.
These two phenomena came together during the first three quarters of 2010. During this period LISI’s organic growth was weakened, before restarting a more positive trend from October. This latest stage might mark the end of the aerospace depression, at least in Europe, while the automotive market too has again found the road to growth, though on a global scale.
LISI has benefited from this improved economic situation and has regained an organic growth rate of over 8% for the last quarter of 2010, which the Group had not seen for
2 years. With the input of the business acquired from Acument (automotive) and Stryker (medical), the Group’s consolidated sales revenues reached €777m in 2010, up almost 12% on 2009.
Even if the economic uncertainties of a world in flux urge us to be careful, we still have the feeling that we have started a new growth cycle for all of our businesses.
As in 2009 the Group's main targets in 2010 remained focused on cash generation and reducing the Group's borrowings. By maintaining a free cash flow at 7.1% of sales revenues – similar to the previous year – we have brought the Group’s gearing to 3.6%,
in line with the targets we had set ourselves.
We also benefited from our restructuring work that had been needed to get through the crisis, in order to recommence our external growth strategy, reflected in the Acument and Stryker acquisitions. This let us significantly increase the Group’s profitability. Current operating profit was up 45% at €49.5m, while net profit in 2010 was €32.9m, as compared with €9.4m in 2009.
This encouraging performance has led the Group to offer its shareholders a dividend of €1.05 per share, up 50% on the previous year.
The 2011 financial year will firstly be marked by the exit of the “packaging for perfumes and cosmetics” division, which has been part of the Group since the 1980s but in 2009 represented only 5% of its sales revenues. Following that disposal LISI shall be operating solely in its original business – fasteners and mechanical safety components – where all the 2010 acquisitions took place, and in which the Group is ranked 4th worldwide and the leader in Europe1.
Without setting aside the cash targets needed for financing growth, our core issues in 2011 will be to strongly advance our development projects together with our plans for progress with both customers and staff: strengthening our competitiveness, improving our quality levels, supported by an ambitious investment program, reducing inventories and optimizing capital employed through “lean manufacturing”, seeking excellence in safety at work and protection of the environment. On this latter subject, we are especially pleased to have obtained in 2010 the ISO 14001 certification that we had targeted. Today 31 of the Group’s locations are certified. The last three ought to obtain certification in 2011. For us, this has been as important a target as our technological and financial performance.
1 Source: "World Industrial Fasteners" report by Freedonia of September 2010Back to top